What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-01-07 compared with 2021-09-30 · 148 added, 101 removed, 476 unchanged (34% of the section changed)

4 unchanged sentences

(in thousands of dollars, except per share data)

Three Months Ended

Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

Net sales $ 78,280 $ 72,770 $ 155,251 $ 142,986

13 unchanged sentences

Other income (expense), net ( 10 ) ( 102 ) ( 362 ) 422

Total other income (expense), net ( 508 ) 309

Total other expense, net ( 184 ) ( 337 ) ( 692 ) ( 28 )

Loss before income tax benefit ( 8,863 ) ( 5,173 ) ( 17,471 ) ( 9,986 )

12 unchanged sentences

(in thousands of dollars)

Three Months Ended

Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

Net loss $ ( 8,351 ) $ ( 4,268 ) $ ( 15,323 ) $ ( 8,536 )

10 unchanged sentences

(in thousands of dollars, except share data)

Aug 31, 2021 May 31, 2021

Nov 30, 2021 May 31, 2021

Current assets

16 unchanged sentences

Total current liabilities 54,475 57,584

Long-term debt, net of current portion 25,000 20,000

Long-term debt 25,000 20,000

Deferred income taxes 17,994 19,955

Contingent consideration, net of current portion 15,936 15,741

Contingent consideration 16,540 15,741

Other long-term liabilities 7,726 8,701

5 unchanged sentences

Common stock, par value $ 0.01 per share, 75,000,000 shares authorized;

39,390,241 and 38,920,951 shares issued and 39,020,241 and 38,550,951 shares outstanding at August 31, 2021 and May 31, 2021, respectively

39,455,193 and 38,920,951 shares issued and 39,085,193 and 38,550,951 shares outstanding at November 30, 2021 and May 31, 2021, respectively

Additional paid-in capital 580,330 573,507

Accumulated deficit ( 147,189 ) ( 131,866 )

Treasury stock, 370,000 shares at August 31, 2021 and May 31, 2021, respectively

Treasury stock, 370,000 shares at November 30, 2021 and May 31, 2021, respectively

( 5,714 ) ( 5,714 )

7 unchanged sentences

(in thousands of dollars)

Three Months Ended

Aug 31, 2021 Aug 31, 2020

Six Months Ended

Nov 30, 2021 Nov 30, 2020

Cash flows from operating activities:

Net loss $ ( 15,323 ) $ ( 8,536 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization 14,276 13,013

11 unchanged sentences

Accounts payable, accrued and other liabilities ( 4,514 ) ( 3,847 )

Net cash used in operating activities ( 8,904 ) ( 5,425 )

Net cash (used in) provided by operating activities ( 6,963 ) 6,023

Cash flows from investing activities:

8 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 354 ) 271

Decrease in cash and cash equivalents ( 12,689 ) ( 6,506 )

(Decrease) increase in cash and cash equivalents ( 13,870 ) 3,590

Cash and cash equivalents at beginning of period 48,161 54,435

21 unchanged sentences

Balance at August 31, 2021 39,390,241 $ 379 $ 576,380 $ ( 138,838 ) $ 3,743 ( 370,000 ) $ ( 5,714 ) $ 435,950

Net loss ( 8,351 ) ( 8,351 )

Exercise of stock options 56,064 1,022 1,022

Issuance/Cancellation of restricted stock units 8,695 ( 83 ) ( 83 )

Purchases of common stock under ESPP 193 3 3

Stock-based compensation 3,008 3,008

Other comprehensive income, net of tax 819 819

Balance at November 30, 2021 39,455,193 $ 379 $ 580,330 $ ( 147,189 ) $ 4,562 ( 370,000 ) $ ( 5,714 ) $ 432,368

Common Stock Additional

10 unchanged sentences

Balance at August 31, 2020 38,693,078 $ 375 $ 564,225 $ ( 104,586 ) $ 754 ( 370,000 ) $ ( 5,714 ) $ 455,054

Net loss ( 4,268 ) ( 4,268 )

Issuance/Cancellation of restricted stock units 8,952 ( 10 ) ( 10 )

Stock-based compensation 2,387 2,387

Other comprehensive income, net of tax 1,180 1,180

Balance at November 30, 2020 38,702,030 $ 375 $ 566,602 $ ( 108,854 ) $ 1,934 ( 370,000 ) $ ( 5,714 ) $ 454,343

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Balance Sheet as of August 31, 2021, the Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three months ended August 31, 2021 and 2020, the Consolidated Statements of Stockholders’ Equity for the three months ended August 31, 2021 and 2020 and the Consolidated Statements of Cash Flows for the three months ended August 31, 2021 and 2020 have been prepared by the Company and are unaudited.

The Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three and six months ended November 30, 2021 and 2020, the Consolidated Balance Sheet as of November 30, 2021, the Consolidated Statements of Cash Flows for the six months ended November 30, 2021 and 2020, and the Consolidated Statements of Stockholders’ Equity for the six months ended November 30, 2021 and 2020 have been prepared by the Company and are unaudited.

The Consolidated Balance Sheet as of May 31, 2021 was derived from audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to state fairly the financial position, changes in stockholders’ equity and comprehensive income, results of operations and cash flows as of and for the period ended August 31, 2021 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three months ended August 31, 2021 and 2020 include the accounts of AngioDynamics, Inc.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to state fairly the financial position, changes in stockholders’ equity and comprehensive income, results of operations and cash flows as of and for the period ended November 30, 2021 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three and six months ended November 30, 2021 and 2020 include the accounts of AngioDynamics, Inc.

and its wholly owned subsidiaries, collectively, "us", "we" or the “Company”.

1 unchanged sentence

Camaro Support Catheter Asset Acquisition

On July 27, 2021, the Company acquired the Camaro support catheter asset from QX Medical, LLC for an aggregate purchase price of $ 4.0 million, which included an upfront payment of $ 3.6 million and $ 0.4 million in purchase price holdbacks, along with $ 1.0 million of potential future contingent consideration related to revenue milestones.

On July 27, 2021, the Company acquired the Camaro support catheter (rebranded as Syntrax) from QX Medical, LLC for an aggregate purchase price of $ 4.0 million, which included an upfront payment of $ 3.6 million and $ 0.4 million in purchase price holdbacks, along with $ 1.0 million of potential future contingent consideration related to revenue milestones.

This acquisition supports the Auryon product family and the Company's strategic plan.

15 unchanged sentences

The following table summarizes net sales by Global Business Unit ("GBU") and geography:

Three Months Ended Aug 31, 2021

Three Months Ended Aug 31, 2020

Three Months Ended Nov 30, 2021

Three Months Ended Nov 30, 2020

(in thousands) United States International Total United States International Total

3 unchanged sentences

Total $ 65,350 $ 12,930 $ 78,280 $ 60,684 $ 12,086 $ 72,770

As the Company has previously announced, the Company is focused on its ongoing transformation from a company with abroad portfolio of largely undifferentiated products to a more focused medical technology company that delivers unique and

innovative health care solutions.

Six Months Ended Nov 30, 2021

Six Months Ended Nov 30, 2020

(in thousands) United States International Total United States International Total

Endovascular Therapies $ 71,006 $ 6,712 $ 77,718 $ 57,669 $ 6,088 $ 63,757

Vascular Access 41,180 8,846 50,026 39,383 12,652 52,035

Oncology 17,628 9,879 27,507 17,740 9,454 27,194

Total $ 129,814 $ 25,437 $ 155,251 $ 114,792 $ 28,194 $ 142,986

As the Company has previously announced, the Company is focused on its ongoing transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company that delivers unique and innovative health care solutions.

The Company believes that this transformation will enable the Company to shift the portfolio from the mature, lower-growth markets where we have competed in the past by investing in technology and products that provide access to larger and faster growing markets.

As such, we believe the growth in the near to mid-term will be driven by our high technology products including Auryon, Mechanical Thrombectomy (which includes AngioVac and thrombolytics) and NanoKnife.

We will refer to these high technology product lines as our Med Tech business and we will refer to the remainder of the portfolio as our Med Device business.

As such, we believe the growth in the near to mid-term will be driven by our high technology products including Auryon, Thrombectomy (which includes AngioVac, AlphaVac and thrombolytics) and NanoKnife.

We will refer to these high technology products as our Med Tech business and we will refer to the remainder of the portfolio as our Med Device business.

The following table summarizes net sales by Med Tech and Med Device:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

Med Tech $ 18,886 $ 13,849 $ 36,504 $ 24,335

23 unchanged sentences

The Company enters into agreements to place placement and evaluation units (“units”) at customer sites, but the Company retains title to the units.

The duration of these agreements are typically a year and the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables.

These types of agreements include an

embedded operating lease for the right to use the units.

During the duration of these agreements the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables.

These types of agreements include an embedded operating lease for the right to use the units.

In these arrangements, revenue recognized for the sale of the disposables is not allocated between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value.

6 unchanged sentences

The Company establishes reserves for such amounts, which is included in accrued expenses in the accompanying Consolidated Balance Sheets.

These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes and administrative fees the Company is required to pay to group purchasing organizations.

These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes.

The Company is also required to pay administrative fees to group purchasing organizations.

Product Returns:

4 unchanged sentences

The Company currently estimates product return liabilities using its historical product return information and considers other factors that it believes could significantly impact its expected returns, including product recalls.

During the three months ended August 31, 2021, such product returns were not material.

During the six months ended November 30, 2021, such product returns were not material.

Contract Balances with Customers

4 unchanged sentences

The following table presents changes in the Company’s receivables, contract assets and contract liabilities with customers:

(in thousands) Aug 31, 2021 May 31, 2021

(in thousands) Nov 30, 2021 May 31, 2021

Receivables $ 38,205 $ 35,405

1 unchanged sentence

Contract liabilities $ 690 $ 426

During the three months ended August 31, 2021, the Company had additions to contract liabilities of $ 0.4 million.

This was offset by $ 0.4 million in revenue that was recognized during the three months ended August 31, 2021.

During the six months ended November 30, 2021, the Company had additions to contract liabilities of $ 0.8 million.

This was offset by $ 0.5 million in revenue that was recognized during the six months ended November 30, 2021.

Costs to Obtain or Fulfill a Customer Contract

Under ASC 606, the Company recognizes an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs.

Under ASC 606, the Company may recognize an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs.

The Company’s sales incentive compensation plans qualify for capitalization since these plans are directly related to sales achieved during a period of time.

2 unchanged sentences

Shipping and handling costs, associated with the distribution of finished products to customers, are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer.

Amounts charged to customers for shipping are recorded in net sales.

Amounts charged to customers for shipping and handling are recorded in net sales.

Inventories are stated at lower of cost and net realizable value (using the first-in, first-out method).

Inventories consisted of the following:

(in thousands) Aug 31, 2021 May 31, 2021

(in thousands) Nov 30, 2021 May 31, 2021

Raw materials $ 26,706 $ 22,925

5 unchanged sentences

Based on these assumptions, the Company estimates the amount of obsolete, expiring and slow-moving inventory.

The total inventory reserve at August 31, 2021 and May 31, 2021 was $ 3.9 million and $ 3.8 million, respectively.

The total inventory reserve at November 30, 2021 and May 31, 2021 was $ 4.0 million and $ 3.8 million, respectively.

GOODWILL AND INTANGIBLE ASSETS

5 unchanged sentences

Even though the Company determined that there was no goodwill impairment as of December 31, 2020, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal, regulatory, business or economic conditions or a more-likely-than-not expectation that the reporting unit or a significant portion of the reporting unit will be sold or disposed of, would require an interim assessment for the reporting unit prior to the next required annual assessment as of December 31, 2021.

There were no adjustments to goodwill for the three months ended August 31, 2021 other than foreign currency translation adjustments.

There were no adjustments to goodwill for the six months ended November 30, 2021 other than foreign currency translation adjustments.

Definite Lived Intangible Assets

1 unchanged sentence

Useful lives range from two to eighteen years .

The Company periodically reviews, and adjusts, if necessary, the estimated useful lives of its intangible assets and reviews such assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets or asset groups may not be recoverable.

that the carrying value of the assets or asset groups may not be recoverable.

If an intangible asset or asset group is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset.

12 unchanged sentences

$ 313,235 $ ( 144,258 ) $ 168,977

Amortization expense for the three months ended August 31, 2021 and 2020 was $ 4.8 million and $ 5.0 million, respectively.

Amortization expense for the three months ended November 30, 2021 and 2020 was $ 4.9 million and $ 4.6 million, respectively.

Amortization expense for the six months ended November 30, 2021 and 2020 was $9.7 million and $9.5 million, respectively.

Expected future amortization expense related to the intangible assets for each of the following fiscal years is as follows:

4 unchanged sentences

Accrued liabilities consisted of the following:

(in thousands) Aug 31, 2021 May 31, 2021

(in thousands) Nov 30, 2021 May 31, 2021

Payroll and related expenses $ 13,308 $ 20,408

8 unchanged sentences

LONG-TERM DEBT

On June 3, 2019 the Company repaid all amounts outstanding under its existing Credit Agreement and entered into a new Credit Agreement with the lender's party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Bank of America, N.A.

On June 3, 2019 the Company repaid all amounts outstanding under its then existing credit agreement and entered into a new Credit Agreement with the lender's party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Bank of America, N.A.

and KeyBank National Association, as co-syndication agents.

11 unchanged sentences

* The definitions of consolidated total indebtedness, consolidated EBITDA, consolidated capital expenditures and consolidated interest expense are specifically defined in the Credit Agreement included as an exhibit to Form 8-K filed on June 6, 2019.

As of August 31, 2021, there was $ 25.0 million outstanding on the Revolving Facility.

As of August 31, 2021 and May 31, 2021, the carrying value of long-term debt approximated its fair market value.

The interest rate on the Revolving Facility at August 31, 2021 was 1.34 %.

As of November 30, 2021, there was $ 25.0 million outstanding on the Revolving Facility.

As of November 30, 2021 and May 31, 2021, the carrying value of long-term debt approximated its fair market value.

The interest rate on the Revolving Facility at November 30, 2021 was 1.34 %.

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year adjusted for any discrete events, which are recorded in the period that they occur.

The estimated annual effective tax rate prior to discrete items was 10.6 % as of the first quarter of fiscal year 2022, as compared to 14.2 % for the same period in fiscal year 2021.

The estimated annual effective tax rate prior to discrete items was 12.3 % as of the second quarter of fiscal year 2022, as compared to 16.1 % for the same period in fiscal year 2021.

In fiscal year 2022, the Company’s effective tax rate differs from the U.S.

4 unchanged sentences

Based on the review of all available evidence, the Company determined that it has not yet attained a sustained level of profitability and the objectively verifiable negative evidence outweighed the positive evidence.

Therefore, the Company has provided a valuation allowance on its federal and state net operating loss carryforwards, federal and state R&D credit carryforwards and other net deferred tax assets that have a limited life and are not supportable by the naked credit deferred tax liability sourced income as of August 31, 2021.

The Company will continue to assess the level of the valuation allowance required.

3 unchanged sentences

The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance share units, performance shares and other incentive awards to the Company's employees, directors and other service providers.

As of August 31, 2021, there was a maximum of 1.7 million shares of common stock available for future grant under the 2020 Plan.

As of November 30, 2021, there was a maximum of 1.5 million shares of common stock available for future grant under the 2020 Plan.

Prior to the adoption of the 2020 Plan, equity awards were issued under the 2004 Stock and Incentive Award Plan (the “2004 Plan”).

1 unchanged sentence

The Company also has an employee stock purchase plan.

As of August 31, 2021, there was a maximum of 2.4 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended August 31, 2021 and 2020, share-based compensation expense was $ 2.4 million and $ 1.9 million, respectively.

During the three months ended August 31, 2021 and 2020, the Company granted stock options and restricted stock units under the 2020 and 2004 Plan to certain employees and members of the Board of Directors.

As of November 30, 2021, there was a maximum of 2.4 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended November 30, 2021 and 2020, share-based compensation expense was $ 3.0 million and $ 2.4 million, respectively.

For the six months ended November 30, 2021 and 2020, share-based compensation expense was $ 5.4 million and $ 4.3 million, respectively.

During the six months ended November 30, 2021 and 2020, the Company granted stock options and restricted stock units under the 2020 and 2004 Plan to certain employees and members of the Board of Directors.

Stock option awards are valued using the Black-Scholes option-pricing model and then amortized on a straight-line basis over the requisite service period of the award.

Restricted stock unit awards are valued based on the closing trading value of the Company’s common stock on the date of grant and then amortized on a straight-line basis over the requisite service period of the award.

During the three months ended August 31, 2021 and 2020, the Company granted performance share units under the 2020 and 2004 Plan to certain employees.

During the six months ended November 30, 2021 and 2020, the Company granted performance share units under the 2020 and 2004 Plan to certain employees.

The awards may be earned by achieving performance levels over the requisite service period.

The performance criteria are based on achieving certain performance targets and the total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of the common stock of a pre-defined industry peer-group.

The fair value of these awards are based on the closing trading value of the Company’s common stock on the date of grant and use a Monte Carlo simulation model.

As of August 31, 2021, there was $ 22.4 million of unrecognized compensation expense related to share-based payment arrangements.

These costs are expected to be recognized over a weighted-average period of approximately four years .

The fair value of these awards is based on a Monte Carlo simulation model.

As of November 30, 2021, there was $ 22.1 million of unrecognized compensation expense related to share-based payment arrangements.

These costs are expected to be recognized over a weighted-average period of approximately three years .

The Company has sufficient shares to satisfy expected share-based payment arrangements.

4 unchanged sentences

The following table reconciles basic to diluted weighted-average shares outstanding:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

Basic 39,053 38,327 38,893 38,242

4 unchanged sentences

The Company considers the business to be a single operating segment engaged in the development, manufacture and sale of medical devices for vascular access, peripheral vascular disease and oncology on a global basis.

The Company's chief operating decision maker, the President and Chief Executive Officer (CEO), evaluates the various global product portfolios on a net sales basis utilizing various breakouts of the data including Global Business Unit, Med Tech versus Med Device and geography.

Executives reporting to the CEO include those responsible for commercial operations, manufacturing operations,

regulatory and quality and certain corporate functions.

The CEO evaluates profitability, investment and cash flow metrics on a consolidated worldwide basis due to shared infrastructure and resources.

Executives reporting to the CEO include those responsible for commercial operations, manufacturing operations, regulatory and quality and certain corporate functions.

The CEO evaluates profitability, investment and cash flow metrics on a consolidated global basis due to shared infrastructure and resources.

The table below summarizes net sales by Global Business Unit:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

Endovascular Therapies $ 39,660 $ 33,900 $ 77,718 $ 63,757

3 unchanged sentences

The table below summarizes net sales by Med Tech and Med Device:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

Med Tech $ 18,886 $ 13,849 $ 36,504 $ 24,335

2 unchanged sentences

The table below summarizes net sales by geographic area based on external customer location:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

United States $ 65,350 $ 60,684 $ 129,814 $ 114,792

14 unchanged sentences

Fair Value Measurements using inputs considered as:

Fair Value at Aug 31, 2021

Fair Value at Nov 30, 2021

(in thousands) Level 1 Level 2 Level 3

8 unchanged sentences

Total Financial Liabilities $ — $ — $ 15,741 $ 15,741

There were no transfers between Level 1, 2 and 3 for the three months ended August 31, 2021 and 2020.

There were no transfers between Level 1, 2 and 3 for the three and six months ended November 30, 2021 and 2020.

The table below presents the changes in fair value components of Level 3 instruments:

Three Months Ended Aug 31, 2021

Three Months Ended Nov 30, 2021

(in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance, August 31, 2021 $ 15,936

Total gains or losses (realized/unrealized):

Change in present value of contingent consideration (1)

Currency gain from remeasurement ( 5 )

Balance, November 30, 2021

Six Months Ended Nov 30, 2021

(in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance, May 31, 2021

1 unchanged sentence

Change in present value of contingent consideration (1)

Balance, August 31, 2021

Currency gain from remeasurement ( 5 )

Balance, November 30, 2021

(1) Change in the fair value of contingent consideration is included in earnings and comprised of changes in estimated earn out payments based on projections of Company performance and amortization of the present value discount.

7 unchanged sentences

Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future.

The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of August 31, 2021:

The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of November 30, 2021:

(in thousands) Fair Value Valuation Technique Unobservable Input Range

2 unchanged sentences

Projected fiscal year of payment 2023 - 2025

At August 31, 2021, the amount of undiscounted future contingent consideration that the Company expects to pay as a result of all completed acquisitions is approximately $ 20.0 million.

At November 30, 2021, the amount of undiscounted future contingent consideration that the Company expects to pay as a result of all completed acquisitions is approximately $ 20.0 million.

The milestones, including revenue projections and technical milestones associated with the contingent consideration must be reached in future periods ranging from fiscal years 2022 to 2029 in order for the associated consideration to be paid.

5 unchanged sentences

The following table presents supplemental balance sheet information related to leases:

(in thousands) Balance Sheet Location Aug 31, 2021 May 31, 2021

(in thousands) Balance Sheet Location Nov 30, 2021 May 31, 2021

Operating lease ROU asset Other assets $ 8,159 $ 9,382

8 unchanged sentences

The maturities of the lease liabilities for each of the following fiscal years is:

(in thousands) Aug 31, 2021

(in thousands) Nov 30, 2021

Remainder of 2022 $ 1,361

5 unchanged sentences

Long-term lease obligations $ 6,011

During the three months ended August 31, 2021 and 2020, the Company recognized $ 0.7 million and $ 0.9 million of operating lease expense, respectively, which includes immaterial short-term leases.

During the three months ended November 30, 2021 and 2020, the Company recognized $ 0.7 million and $ 0.7 million of operating lease expense, respectively, which includes immaterial short-term leases.

During the six months ended November 30, 2021 and 2020, the Company recognized $ 1.4 million and $ 1.6 million of operating lease expense, respectively, which includes immaterial short-term leases.

The expenses on the Consolidated Statement of Operations were classified as follows:

Three Months Ended

(in thousands) Aug 31, 2021

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021

Nov 30, 2020 Nov 30, 2021

Cost of sales $ 218 $ 192 $ 437 $ 393

2 unchanged sentences

General and administrative 434 256 764 551

The following table presents supplemental cash flow and other information related to leases for the three months ended:

(in thousands) Aug 31, 2021 Aug 31, 2020

$ 743 $ 737 $ 1,430 $ 1,622

The following table presents supplemental cash flow and other information related to leases for the six months ended:

(in thousands) Nov 30, 2021 Nov 30, 2020

Cash paid for amounts included in the measurement of lease liabilities

17 unchanged sentences

A scheduling order was entered on March 23, 2021.

The Company filed a Motion to Amend its Answer and Counterclaims on April 14, 2021.

This motion seeks to add counterclaims for infringement of U.S.

and 10,632,295, as well as a counterclaim of inequitable conduct, and remains pending.

On July 22, 2021, in another case against a different defendant the District of Utah invalidated multiple claims of the ‘302, ‘022, and ‘615 Patents under 35 USC §101, including claims asserted against the Company.

Following the Utah court’s decision, the Company filed a Motion for Judgment on the Pleadings (which remains pending) based on collateral estoppel on August 9, 2021.

On July 22, 2021, in

another case against a different defendant the District of Utah invalidated multiple claims of the ‘302, ‘022, and ‘615 Patents under 35 USC §101, including claims asserted against the Company.

Following the Utah court’s decision, the Company filed a Motion for Judgment on the Pleadings based on collateral estoppel on August 9, 2021.

Bard filed its opposition brief on September 2, 2021 and the Company filed a reply on September 9, 2021.

The parties also filed a stipulation to stay all deadlines pending resolution of the Company’s Motion for Judgment on the Pleadings, which the Court entered on August 16, 2021.

Following a hearing on the Motion for Judgment on the Pleadings on December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal from the Utah Decision.

Previously, the Company had filed a Motion for Leave to Amend its Answer and Counterclaims on April 14, 2021.

This motion sought to add counterclaims for infringement of U.S.

and 10,632,295, as well as a counterclaim of inequitable conduct.

On November 5, 2021, the Company notified the District of Delaware that the Utah decision was certified for appeal to the Court of Appeals for the Federal Circuit.

Contemporaneously, the Company withdrew its Motion for Leave to Amend its Answer and Counterclaims without prejudice to refile.

Bard filed its Opening Appellate Brief in its appeal at the Federal Circuit on December 8, 2021.

The Company believes these claims are without merit and intends to defend them vigorously.

7 unchanged sentences

Bard appealed the judgment to the Federal Circuit and on November 10, 2020, the Federal Circuit reversed the judgment in part with respect to Section 101 (subject matter eligibility), and vacated and remanded the trial court’s invalidity and non-infringement judgments.

The Company filed a combined Petition

for rehearing and rehearing en banc on December 10, 2020, which was denied on January 15, 2021.

The Company filed a combined Petition for rehearing and rehearing en banc on December 10, 2020, which was denied on January 15, 2021.

The Federal Circuit issued its mandate on January 22, 2021.

On March 15, 2021, the District of Delaware entered an order requiring the parties to submit status reports and denied as moot the Company’s motion for attorney’s fees and expenses.

The parties submitted status reports on March 29, 2021 and the Court subsequently held two status conferences on July 27, 2021 and August 20, 2021.

The parties agreed to schedule trial the week of May 9, 2022 and filed a joint letter indicating the same on September 3, 2021.

The Court has not yet docketed the trial and the matter remains pending.

The parties agreed to schedule trial the week of May 9, 2022, and the trial has been docketed on the Court's calendar.

The Company maintains its belief that Bard’s claims are without merit.

6 unchanged sentences

Bard submitted its brief on August 12, 2021, and the Company submitted its reply on September 2, 2021.

The motion remains pending.

The Company maintains its belief that Bard’s claims are without merit.

On December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal of the Utah decision invalidating multiple claims the ‘302, ‘022, and ‘615 patents under 35 USC §101.

The Company maintains its belief that Bard’s claims of the related are without merit.

The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.

13 unchanged sentences

Acquisition, restructuring and other items, net, consisted of:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

$ 2,072 $ 1,185 $ 4,156 $ 1,980

Mergers and acquisitions (2)

Transition service agreement (3)

— ( 334 ) — ( 709 )

Divestiture (4)

Manufacturing relocation (5)

Other 63 165 419 791

1 unchanged sentence

(1) Legal expenses related to litigation that is outside the normal course of business.

(2) Mergers and acquisitions expense related to legal and due diligence.

(3) Transition services agreement that was entered into as a result of the sale of the Fluid Management business.

(4) Divestiture expenses incurred to transition manufacturing from Glens Falls, NY to Queensbury, NY.

(5) Expenses to relocate certain manufacturing lines from Queensbury, NY to Costa Rica.

ACCUMULATED OTHER COMPREHENSIVE INCOME

Changes in each component of accumulated other comprehensive income, net of tax, are as follows:

Three Months Ended Aug 31, 2021

Three Months Ended Nov 30, 2021

(in thousands) Foreign currency translation income

Balance at August 31, 2021 $ 3,743

Other comprehensive income, net of tax 819

Net other comprehensive income $ 819

Balance at November 30, 2021

Six Months Ended Nov 30, 2021

(in thousands) Foreign currency translation income

Balance at May 31, 2021

Other comprehensive income before reclassifications, net of tax 590

Other comprehensive income, net of tax 1,409

Net other comprehensive income $ 1,409

Balance at August 31, 2021

Balance at November 30, 2021

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

2 unchanged sentences

Recently Issued Accounting Pronouncements - Not Yet Applicable or Adopted

There are no new accounting pronouncements issued that are expected to have a material impact on our consolidated financial statements.

Standard Description Effective Date Effect on the Consolidated Financial Statements

ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer.

June 1, 2023 The Company plans to adopt the new standard in the first quarter of fiscal year 2024 and does not expect there to be a material impact to the consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements