What changed in this filing

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Item 1. Financial Statements

2025-01-08 compared with 2024-10-03 · 153 added, 96 removed, 526 unchanged (32% of the section changed)

4 unchanged sentences

(in thousands of dollars, except per share data)

Three Months Ended

Aug 31, 2024 Aug 31, 2023

Three Months Ended Six Months Ended

Nov 30, 2024 Nov 30, 2023 Nov 30, 2024 Nov 30, 2023

Net sales $ 72,845 $ 79,073 $ 140,336 $ 157,752

13 unchanged sentences

Interest income, net 234 534 840 653

Other expense, net ( 173 ) ( 288 )

Total other income (expense), net 433 ( 169 )

Other income (expense), net 12 ( 32 ) ( 161 ) ( 320 )

Total other income, net 246 502 679 333

Income (loss) before income tax benefit ( 10,848 ) ( 12,618 ) ( 23,513 ) 22,243

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(in thousands of dollars)

Three Months Ended

Aug 31, 2024 Aug 31, 2023

Three Months Ended Six Months Ended

Nov 30, 2024 Nov 30, 2023 Nov 30, 2024 Nov 30, 2023

Net income (loss) $ ( 10,738 ) $ ( 29,048 ) $ ( 23,536 ) $ 16,836

11 unchanged sentences

(in thousands of dollars, except share data)

Aug 31, 2024 May 31, 2024

Nov 30, 2024 May 31, 2024

Current assets

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

41,446,390 and 40,801,597 shares issued and 41,004,249 and 40,431,597 shares outstanding at August 31, 2024 and May 31, 2024, respectively

41,449,556 and 40,801,597 shares issued and 40,835,709 and 40,431,597 shares outstanding at November 30, 2024 and May 31, 2024, respectively

Additional paid-in capital 616,253 610,484

Accumulated deficit ( 418,740 ) ( 395,204 )

Treasury stock, 442,141 and 370,000 shares at August 31, 2024 and May 31, 2024, respectively

Treasury stock, 613,847 and 370,000 shares at November 30, 2024 and May 31, 2024, respectively

( 7,381 ) ( 5,714 )

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(in thousands of dollars)

Three Months Ended

Aug 31, 2024 Aug 31, 2023

Six Months Ended

Nov 30, 2024 Nov 30, 2023

Cash flows from operating activities:

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Balance at August 31, 2024 41,446,390 $ 386 $ 613,730 $ ( 408,002 ) $ ( 3,267 ) ( 442,141 ) $ ( 6,265 ) $ 196,582

Net loss ( 10,738 ) ( 10,738 )

Issuance/Cancellation of restricted stock units 3,166 ( 5 ) ( 5 )

Stock-based compensation 2,528 2,528

Common stock repurchased ( 2 ) ( 171,706 ) ( 1,116 ) ( 1,118 )

Other comprehensive loss, net of tax ( 481 ) ( 481 )

Balance at November 30, 2024 41,449,556 $ 384 $ 616,253 $ ( 418,740 ) $ ( 3,748 ) ( 613,847 ) $ ( 7,381 ) $ 186,768

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Common Stock Additional

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Balance at August 31, 2023 40,586,641 $ 383 $ 603,759 $ ( 164,971 ) $ ( 5,653 ) ( 370,000 ) $ ( 5,714 ) $ 427,804

Net loss ( 29,048 ) ( 29,048 )

Issuance/Cancellation of restricted stock units 7,765 ( 16 ) ( 16 )

Issuance/Cancellation of performance share units ( 336 ) ( 336 )

Stock-based compensation 1,877 1,877

Other comprehensive income, net of tax 945 945

Balance at November 30, 2023 40,594,406 $ 383 $ 605,284 $ ( 194,019 ) $ ( 4,708 ) ( 370,000 ) $ ( 5,714 ) $ 401,226

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

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CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Income (Loss) for the three months ended August 31, 2024 and 2023, the Consolidated Balance Sheet as of August 31, 2024, the Consolidated Statements of Cash Flows for the three months ended August 31, 2024 and 2023, and the Consolidated Statements of Stockholders’ Equity for the three months ended August 31, 2024 and 2023 have been prepared by the Company and are unaudited.

The Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended November 30, 2024 and 2023, the Consolidated Balance Sheet as of November 30, 2024, the Consolidated Statements of Cash Flows for the six months ended November 30, 2024 and 2023, and the Consolidated Statements of Stockholders’ Equity for the six months ended November 30, 2024 and 2023 have been prepared by the Company and are unaudited.

The Consolidated Balance Sheet as of May 31, 2024 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, 2024 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three months ended August 31, 2024 and 2023 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, 2024 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three and six months ended November 30, 2024 and 2023 include the accounts of AngioDynamics, Inc.

and its wholly owned subsidiaries (collectively, the "Company", "we", "our" or "us").

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

Three Months Ended August 31, 2024 Three Months Ended August 31, 2023

Three Months Ended November 30, 2024 Three Months Ended November 30, 2023

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

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Total $ 62,678 $ 10,167 $ 72,845 $ 64,002 $ 15,071 $ 79,073

Six Months Ended November 30, 2024 Six Months Ended November 30, 2023

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

Med Tech $ 52,023 $ 7,500 $ 59,523 $ 43,189 $ 8,035 $ 51,224

Med Device 70,136 10,677 80,813 85,212 21,316 106,528

Total $ 122,159 $ 18,177 $ 140,336 $ 128,401 $ 29,351 $ 157,752

Net Product Revenue

4 unchanged sentences

Contracts and Performance Obligations

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The Company contracts with its customers based on customer purchase orders, which in many cases are governed by master purchasing agreements.

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For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations.

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Transaction Price and Allocation to Performance Obligations

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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, 2024 and 2023, such product returns were not material.

During the six months ended November 30, 2024 and 2023, such product returns were not material.

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Contract Balances with Customers

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Accordingly, the Company does not have any contract assets associated with the future right to invoice its customers.

In some cases, if control of the

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product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in the accompanying Consolidated Balance Sheets.

In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in the accompanying Consolidated Balance Sheets.

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

(in thousands) Aug 31, 2024 May 31, 2024

(in thousands) Nov 30, 2024 May 31, 2024

Receivables $ 43,158 $ 43,610

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Contract liabilities $ 56 $ 391

During the three months ended August 31, 2024, the Company had additions to contract liabilities of $ 0.1 million.

This was offset by $ 0.1 million in revenue that was recognized during the three months ended August 31, 2024.

During the six months ended November 30, 2024, the Company had additions to contract liabilities of $ 0.2 million.

This was offset by $ 0.2 million in revenue that was recognized during the six months ended November 30, 2024.

Costs to Obtain or Fulfill a Customer Contract

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Inventories consisted of the following:

(in thousands) Aug 31, 2024 May 31, 2024

(in thousands) Nov 30, 2024 May 31, 2024

Raw materials $ 28,445 $ 30,736

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

The total inventory reserve at August 31, 2024 and May 31, 2024 was $ 3.2 million and $ 3.3 million, respectively.

The total inventory reserve at November 30, 2024 and May 31, 2024 was $ 3.3 million.

INTANGIBLE ASSETS

18 unchanged sentences

$ 191,192 $ ( 113,809 ) $ 77,383

Amortization expense for the three months ended August 31, 2024 and 2023 was $ 2.6 million and $ 3.6 million, respectively.

Amortization expense for the three months ended November 30, 2024 and 2023 was $ 2.6 million and $ 3.6 million, respectively.

Amortization expense for the six months ended November 30, 2024 and 2023 was $ 5.1 million and $ 7.2 million, respectively.

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

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Accrued liabilities consisted of the following:

(in thousands) Aug 31, 2024 May 31, 2024

(in thousands) Nov 30, 2024 May 31, 2024

Payroll and related expenses $ 13,139 $ 15,920

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$ 39,919 $ 41,098

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

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tax rate prior to discrete items was 1.8 % as of the first quarter of fiscal year 2025, as compared to ( 32.0 )% for the same period in fiscal year 2024.

The estimated annual effective tax rate prior to discrete items was 1.7 % as of the second quarter of fiscal year 2025, as compared to 23.7 % for the same period in fiscal year 2024.

In fiscal year 2025, the Company’s effective tax rate differs from the U.S.

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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 as of August 31, 2024.

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

1 unchanged sentence

SHARE-BASED COMPENSATION

On October 13, 2020, the Company's shareholders approved the 2020 Stock and Incentive Award Plan (the “2020 Plan”).

On October 13, 2020, the Company's shareholders approved the 2020 Stock and Incentive Award Plan (the “2020 Plan”), and authorized an initial reserve of 2.4 million shares of common stock available for grants.

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.

On November 14, 2023 the Company's shareholders approved an amendment to the 2020 Plan to increase the reserve of shares of common stock available for future grants by 1.5 million shares.

As of August 31, 2024, there was a maximum of 0.9 million shares of common stock available for future grant under the 2020 Plan.

On November 3, 2022 and November 14, 2023, the Company’s shareholders approved an amendment to the 2020 Plan to increase the reserve of shares of common stock available for grants by 1.95 million shares and 1.5 million shares, respectively.

On November 12, 2024, the Company's shareholders approved an additional amendment to the 2020 Plan to increase the reserve of shares of common stock available for future grants by 3.2 million shares.

As of November 30, 2024, there was a maximum of 4.1 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”).

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The Company also has an employee stock purchase plan.

On November 3, 2022 the Company's shareholders approved an amendment to the employee stock purchase plan to increase the reserve of shares of common stock available for future grants by 1.0 million shares.

As of August 31, 2024, there was a maximum of 2.7 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended August 31, 2024 and 2023, share-based compensation expense was $ 3.2 million and $ 4.1 million, respectively.

During the three months ended August 31, 2024 and 2023, the Company granted stock options and restricted stock units under the 2020 Plan to certain employees and members of the Board of Directors.

As of November 30, 2024, there was a maximum of 2.7 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended November 30, 2024 and 2023, share-based compensation expense was $ 2.5 million and $ 1.9 million, respectively.

For the six months ended November 30, 2024 and 2023, share-based compensation expense was $ 5.7 million and $ 6.0 million, respectively.

During the six months ended November 30, 2024 and 2023, the Company granted stock options and restricted stock units under the 2020 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.

1 unchanged sentence

In July 2023, the Board of Directors approved a change in terms of restricted stock units granted to non-employee directors to provide for immediate vesting upon grant of the award.

During the three months ended August 31, 2024 and 2023, the Company granted performance share units under the 2020 Plan to certain employees.

During the six months ended November 30, 2024 and 2023, the Company granted performance share units under the 2020 Plan to certain employees.

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

1 unchanged sentence

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

As of August 31, 2024, there was $ 21.9 million of unrecognized compensation expense related to share-based payment arrangements.

As of November 30, 2024, there was $ 20.0 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.

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On July 16, 2024, the Board of Directors approved a share repurchase program (the "Repurchase Program") under which they authorized the Company the option to repurchase up to $ 15.0 million of its outstanding common stock.

The timing and amount of any share repurchases under the authorization will be determined by management within certain parameters and based on market conditions and other considerations.

During the first quarter of fiscal year 2024, the Company repurchased

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72,141 shares of common stock in the open market at an aggregate cost of $ 0.5 million under the Repurchase Program.

As of August 31, 2024, $ 14.5 million remained available for repurchase under the Repurchase Program.

During the second quarter of fiscal year 2025, the Company repurchased 171,706 shares of common stock in the open market at an aggregate cost of $ 1.1 million under the Repurchase Program.

During the first quarter of fiscal year 2025, the Company repurchased 72,141 shares of common stock in the open market at an aggregate cost of $ 0.5 million under the Repurchase Program.

As of November 30, 2024, $ 13.3 million remained available for repurchase under the Repurchase Program.

EARNINGS PER SHARE

3 unchanged sentences

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

Three Months Ended

(in thousands) Aug 31, 2024 Aug 31, 2023

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 Nov 30, 2024 Nov 30, 2023

Basic 40,922 40,219 40,787 40,030

11 unchanged sentences

therefore, the CEO does not review any asset information by operating segment and, accordingly, asset information is not reported or evaluated by operating segment.

Total assets were $ 293.6 million as of August 31, 2024.

Total assets were $ 291.6 million as of November 30, 2024.

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

Three Months Ended

(in thousands) Aug 31, 2024 Aug 31, 2023

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Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 Nov 30, 2024 Nov 30, 2023

Med Tech net sales $ 31,554 $ 25,363 $ 59,523 $ 51,224

7 unchanged sentences

Gross margin 54.8 % 50.9 % 54.6 % 50.9 %

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Geographic information

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

Three Months Ended

(in thousands) Aug 31, 2024 Aug 31, 2023

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 Nov 30, 2024 Nov 30, 2023

United States $ 62,678 $ 64,002 $ 122,159 $ 128,401

1 unchanged sentence

Total $ 72,845 $ 79,073 $ 140,336 $ 157,752

For the three months ended August 31, 2024 and 2023, international sales as a percentage of total net sales were 11.9 % and 18.1 %, respectively.

For the three months ended November 30, 2024 and 2023, international sales as a percentage of total net sales were 14.0 % and 19.1 %, respectively.

For the six months ended November 30, 2024 and 2023, international sales as a percentage of total net sales were 13.0 % and 18.6 %, respectively.

Sales to any one country outside the U.S., as determined by shipment destination, did not comprise a material portion of net sales in any of the last three fiscal years.

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The recurring fair value measurements using significant unobservable inputs (Level 3) relate to contingent consideration liabilities.

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The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis:

Fair Value Measurements using inputs considered as:

Fair Value at Aug 31, 2024

Fair Value at Nov 30, 2024

(in thousands) Level 1 Level 2 Level 3

8 unchanged sentences

Total Financial Liabilities $ — $ — $ 4,728 $ 4,728

There were no transfers between Level 1, 2 and 3 for the three months ended August 31, 2024 and 2023.

There were no transfers between Level 1, 2 and 3 for the three and six months ended November 30, 2024 and 2023.

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

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Three Months Ended Aug 31, 2024

Three Months Ended Nov 30, 2024

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

Balance, August 31, 2024 $ 4,804

Change in present value of contingent consideration (1)

Balance, November 30, 2024

Six Months Ended November 30, 2024

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

Balance, May 31, 2024 $ 4,728

Change in present value of contingent consideration (1)

Balance, August 31, 2024

Balance, November 30, 2024

(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, 2024:

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The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of November 30, 2024:

(in thousands) Fair Value Valuation Technique Unobservable Input Range

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Projected fiscal year of payment 2025

At August 31, 2024, the amount of undiscounted future contingent consideration that the Company expects to pay as a result of all completed acquisitions is approximately $ 5.0 million.

At November 30, 2024, the amount of undiscounted future contingent consideration that the Company expects to pay as a result of all completed acquisitions is approximately $ 5.0 million.

The milestones, including revenue projections and technical milestones associated with the contingent consideration, must be reached in future periods ranging from fiscal years 2025 to 2029 in order for the associated consideration to be paid.

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The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

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

(in thousands) Balance Sheet Location Aug 31, 2024 May 31, 2024

(in thousands) Balance Sheet Location Nov 30, 2024 May 31, 2024

Operating lease ROU asset Other assets $ 4,803 $ 5,804

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

(in thousands) Aug 31, 2024

(in thousands) Nov 30, 2024

Remainder of 2025 $ 1,077

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Long-term lease obligations $ 3,030

During the three months ended August 31, 2024 and 2023, the Company recognized $ 0.7 million and $ 0.6 million of operating lease expense, respectively, which includes immaterial short-term leases.

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During the three months ended November 30, 2024 and 2023, the Company recognized $ 0.7 million and $ 0.6 million of operating lease expense, respectively, which includes immaterial short-term leases.

During the six months ended November 30, 2024 and 2023, the Company recognized $ 1.3 million and $ 1.3 million of operating lease expense respective, 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, 2024

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024

Nov 30, 2023 Nov 30, 2024

Cost of sales $ 230 $ 219 $ 461 $ 416

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General and administrative 298 329 599 661

$ 656 $ 627 $ 1,337 $ 1,254

The following table presents supplemental cash flow and other information related to leases:

Three Months Ended

(in thousands) Aug 31, 2024 Aug 31, 2023

Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023

Cash paid for amounts included in the measurement of lease liabilities

2 unchanged sentences

Operating leases $ — $ 381

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COMMITMENTS AND CONTINGENCIES

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On March 31, 2024, the Company and Bard’s parent company Becton, Dickinson and Company (collectively, “BD”) entered into a settlement agreement (the “Settlement Agreement”) to resolve the ongoing litigations.

Under the terms of the Settlement Agreement, BD will grant a license to the Company under certain of BD’s port patents and AngioDynamics will grant BD a license under certain of the Company’s catheter patents.

The Company will make a one-time lump sum payment to BD in the amount of $ 7.0 million, $ 3.0 million which was paid within 5 business days of execution of the Settlement Agreement, and the remainder will be payable in installments over the next 12 months ending March 31, 2025.

The Company will also make six minimum annual payments to BD of $ 2.5 million through February, 2029, and potential additional payments if six percent ( 6 %) of annual net sales of the Company’s port products exceed the minimum payment.

Under the terms of the Settlement Agreement, BD granted a license to the Company under certain of BD’s port patents and AngioDynamics granted BD a license under certain of the Company’s catheter patents.

The Company made a one-time lump sum payment to BD in the amount of $ 7.0 million, $ 3.0 million which was paid within 5 business days of execution of the Settlement Agreement, and the remainder is payable in installments during 12 month period ending March 31, 2025.

The Company will also make six minimum annual payments to BD of $ 2.5 million starting in fiscal year 2025, and potential additional payments if six percent ( 6 %) of annual net sales of the Company’s port products exceed the minimum payment.

The parties will participate in the pending appeal before the Federal Circuit of the case that was filed March 10, 2015 and a contingent payment of $ 3.0 million will be due from the Company to BD if the Federal Circuit reverses or vacates the District Court’s findings of invalidity with respect to the patent claims at issue in the case.

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Neither party admitted any liability and the agreement contains mutual covenants not to sue and releases.

As of November 30, 2024,

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there was $ 7.0 million payable to BD recorded in other current liabilities and $ 8.8 million recorded in other long-term liabilities.

Port Product Claims

As of August 31, 2024, the Company is defending approximately 50 product liability claims involving the Company's port products (collectively, the “Port Product Claims”).

As of November 30, 2024, the Company is defending approximately 50 product liability claims involving the Company's port products (collectively, the “Port Product Claims”).

Port Product Claims are pending in various state and federal court jurisdictions, and a motion to transfer the Port Product Claims pursuant to 28 USC § 1407 for coordinated or consolidated pretrial proceedings is pending before the United States Judicial Panel on Multidistrict Litigation.

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The Company continues to receive claims and lawsuits and may in future periods learn additional information regarding other unfiled or unknown claims, or other lawsuits, which could materially impact the Company’s estimate of the number of claims or lawsuits against the Company.

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ACQUISITION, RESTRUCTURING, AND OTHER ITEMS, NET

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

Three Months Ended

(in thousands) Aug 31, 2024 Aug 31, 2023

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 Nov 30, 2024 Nov 30, 2023

$ 56 $ 5,322 $ 410 $ 7,139

Mergers and acquisitions 737 252 737 252

Plant closure (2)

5,102 — 8,691 —

Transition service agreement (3)

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Manufacturing relocation (4)

Other 722 953

— 689 — 1,277

427 102 1,301 1,055

Total $ 5,868 $ 6,188 $ 10,179 $ 9,400

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

(2) Plant closure expense, related to the restructuring of our manufacturing footprint which was announced on January 5, 2024.

(2) Plant closure expenses, related to the restructuring of our manufacturing footprint which was announced on January 5, 2024.

(3) Transition services agreements that were entered into with Merit and Spectrum.

(4) Expenses to relocate certain manufacturing lines out of Queensbury, NY.

(5) Included in the $ 1.1 million in other for the six months ended November 30, 2023 is $ 0.9 million of deferred financing fees that were written-off in conjunction with the sale of the Dialysis and BioSentry businesses and concurrent extinguishment of the debt.

Restructuring

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This Plan will transfer all product manufacturing processes to third-party manufacturers.

The restructuring activities associated with the Plan are expected to be completed in the third quarter of fiscal year 2026.

The following table provides a summary of our estimated costs associated with the plan:

Type of cost Total estimated amount expected to be incurred (in thousands)

In the second quarter of fiscal year 2025, the Company announced a modification to the Plan to maintain a presence in Queensbury, NY for the manufacturing of select products, customer service, logistics, shipping, quality and regulatory operations.

The restructuring activities associated with the modified Plan are still expected to be completed in the third quarter of fiscal year 2026.

The following table provides a summary of our estimated costs associated with the original and modified Plan:

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Type of cost (in thousands) Total original estimated amount expected to be incurred Total modified estimated amount expected to be incurred

Facilities closeout fees (1)

$ 14,500 to $ 15,250

Termination benefits 9,000 to 10,000

Outside consultants 9,000 to 10,000

Validation expenses 4,500 to 5,500

Regulatory filings 750 to 1,250

Other 750 to 1,250

$ 38,500 to $ 43,250

(1) Included in this estimate is approximately $ 13.6 million of non-cash charges for accelerated depreciation and building impairment.

The Company recorded restructuring charges related to the plan during the three months ended August 31, 2024 of $ 3.6 million .

$ 14,500 to $ 15,250 $ 16,000 to $ 17,000

Termination benefits 9,000 to 10,000 6,200 to 7,200

Outside consultants 9,000 to 10,000 7,500 to 8,500

Validation expenses 4,500 to 5,500 3,400 to 4,400

Regulatory filings 750 to 1,250 150 to 650

Other 750 to 1,250 150 to 650

$ 38,500 to $ 43,250 $ 33,400 to $ 38,400

(1) Included in the original and modified estimate is approximately $ 13.6 million and $ 13.3 million of non-cash charges for accelerated depreciation and building impairment, respectively.

The Company recorded restructuring charges related to the plan during the three and six months ended November 30, 2024 of $ 5.1 million and $ 8.7 million, respectively.

Total restructuring charges recorded to date are $ 18.2 million.

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therefore, the expenses related to termination benefits are being recorded ratably over the service period.

The table below presents the restructuring reserve for the three months ended August 31, 2024 :

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Three Months Ended Aug 31, 2024

The table below presents the restructuring reserve for the three and six months ended November 30, 2024 :

Three Months Ended Nov 30, 2024

Termination Benefits Outside Consultants Validation Expenses Facilities Closeout Fees Regulatory Filings Other Total

(in thousands)

Balance at August 31, 2024 $ 855 $ 994 $ 682 $ — $ — $ 74 $ 2,605

Charges 276 2,681 482 1,293 9 361 5,102

Non-cash adjustments — — — ( 1,293 ) — — ( 1,293 )

Cash payments — ( 1,671 ) ( 716 ) — ( 9 ) ( 295 ) ( 2,691 )

Balance at November 30, 2024

$ 1,131 $ 2,004 $ 448 $ — $ — $ 140 $ 3,723

Six Months Ended Nov 30, 2024

Termination Benefits Outside Consultants Validation Expenses Facilities Closeout Fees Regulatory Filings Other Total

(in thousands)

Balance at May 31, 2024 $ 568 $ 1,153 $ 373 $ — $ 6 $ 20 $ 2,120

2 unchanged sentences

Cash payments — ( 2,824 ) ( 1,102 ) — ( 28 ) ( 571 ) ( 4,525 )

Balance at August 31, 2024

Balance at November 30, 2024

$ 1,131 $ 2,004 $ 448 $ — $ — $ 140 $ 3,723

1 unchanged sentence

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

Three Months Ended Aug 31, 2024

Three Months Ended Nov 30, 2024

(in thousands) Foreign currency translation income

Balance at August 31, 2024 $ ( 3,267 )

Other comprehensive income, net of tax ( 481 )

Net other comprehensive income $ ( 481 )

Balance at November 30, 2024

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Six Months Ended Nov 30, 2024

(in thousands) Foreign currency translation income

Balance at May 31, 2024 $ ( 4,365 )

1 unchanged sentence

Net other comprehensive income $ 617

Balance at August 31, 2024

Balance at November 30, 2024

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

11 unchanged sentences

June 1, 2025 The Company plans to adopt the new standard in the first quarter of fiscal year 2026 and does not expect there to be a material impact to the consolidated financial statements.

ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-04):

Disaggregation of Income Statement Expenses

This ASU improves the disclosures about a public business entity's costs and expenses by requiring the Company to disclose more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion) included in each relevant income statement caption.

June 1, 2027 The Company plans to adopt the new standard for the fiscal year 2028 and is assessing the impact to the consolidated financial statements.

There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for fiscal year ended May 31, 2024.

SUBSEQUENT EVENTS

On December 24, 2024, the Company entered into an agreement to sell and leaseback the manufacturing facilities in Queensbury, NY and Glens Falls, NY for a purchase price of $ 5.5 million and $ 1.2 million, respectively and net proceeds of $ 4.8 million and $ 1.1 million, respectively.

The Company also entered into a lease agreement with future lease payments of $ 4.6 million over seven years for Queensbury, NY and $ 0.4 million over three years for Glens Falls, NY.

Table of Content

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