What changed in this filing

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Item 1. Financial Statements

2025-04-02 compared with 2025-01-08 · 167 added, 139 removed, 540 unchanged (36% of the section changed)

4 unchanged sentences

(in thousands of dollars, except per share data)

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

Feb 28, 2025 Feb 29, 2024 Feb 28, 2025 Feb 29, 2024

Net sales $ 72,004 $ 75,182 $ 212,340 $ 232,934

6 unchanged sentences

Amortization of intangibles 2,598 3,287 7,730 10,474

Goodwill impairment — 159,476 — 159,476

Change in fair value of contingent consideration 40 112 272 203

2 unchanged sentences

Gain on sale of assets — 6,657 — 54,499

Operating income (loss) ( 11,094 ) ( 13,120 ) ( 24,192 ) 21,910

Operating loss ( 9,974 ) ( 199,896 ) ( 34,166 ) ( 177,986 )

Other expense:

2 unchanged sentences

Total other income, net 5,565 156 6,244 489

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

Loss before income tax benefit ( 4,409 ) ( 199,740 ) ( 27,922 ) ( 177,497 )

Income tax expense (benefit) ( 2 ) ( 12,004 ) 21 ( 6,597 )

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

Earnings (loss) per share

Net loss $ ( 4,407 ) $ ( 187,736 ) $ ( 27,943 ) $ ( 170,900 )

Loss per share

Basic $ ( 0.11 ) $ ( 4.67 ) $ ( 0.68 ) $ ( 4.26 )

7 unchanged sentences

and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands of dollars)

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

Other comprehensive income (loss), before tax:

Foreign currency translation gain (loss) ( 481 ) 945 617 15

Other comprehensive income (loss), before tax ( 481 ) 945 617 15

Income tax expense related to items of other comprehensive income (loss) — — — —

Other comprehensive income (loss), net of tax ( 481 ) 945 617 15

Total comprehensive income (loss), net of tax $ ( 11,219 ) $ ( 28,103 ) $ ( 22,919 ) $ 16,851

Three Months Ended Nine Months Ended

Feb 28, 2025 Feb 29, 2024 Feb 28, 2025 Feb 29, 2024

Net loss $ ( 4,407 ) $ ( 187,736 ) $ ( 27,943 ) $ ( 170,900 )

Other comprehensive income, before tax:

Foreign currency translation gain 216 1,902 833 1,917

Other comprehensive income, before tax 216 1,902 833 1,917

Income tax expense related to items of other comprehensive loss — — — —

Other comprehensive income, net of tax 216 1,902 833 1,917

Total comprehensive loss, net of tax $ ( 4,191 ) $ ( 185,834 ) $ ( 27,110 ) $ ( 168,983 )

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

4 unchanged sentences

(in thousands of dollars, except share data)

Nov 30, 2024 May 31, 2024

Feb 28, 2025 May 31, 2024

Current assets

3 unchanged sentences

Inventories 63,105 60,616

Earn-out receivable 5,500 —

Prepaid expenses and other 15,440 12,971

19 unchanged sentences

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

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

41,584,678 and 40,801,597 shares issued and 40,970,831 and 40,431,597 shares outstanding at February 28, 2025 and May 31, 2024, respectively

Additional paid-in capital 619,545 610,484

Accumulated deficit ( 423,147 ) ( 395,204 )

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

Treasury stock, 613,847 and 370,000 shares at February 28, 2025 and May 31, 2024, respectively

( 7,381 ) ( 5,714 )

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

Six Months Ended

Nov 30, 2024 Nov 30, 2023

(unaudited)(in thousands of dollars)

Nine Months Ended

Feb 28, 2025 Feb 29, 2024

Cash flows from operating activities:

Net income (loss) $ ( 23,536 ) $ 16,836

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

Net loss $ ( 27,943 ) $ ( 170,900 )

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

Depreciation and amortization 19,967 20,895

4 unchanged sentences

Change in fair value of contingent consideration 272 203

Impairment loss on indefinite-lived intangible assets — 159,476

Deferred income taxes ( 795 ) ( 7,143 )

12 unchanged sentences

Additions to placement and evaluation units ( 3,868 ) ( 3,245 )

Acquisition of intangibles — ( 3,250 )

Proceeds from sale of assets — 134,500

2 unchanged sentences

Repayment of long-term debt — ( 50,000 )

Principal payments on financing arrangement ( 58 ) —

Proceeds from financing arrangement 6,310 —

Payment of acquisition related contingent consideration — ( 10,000 )

1 unchanged sentence

Proceeds from exercise of stock options and employee stock purchase plan 933 752

Net cash used in financing activities ( 1,632 ) ( 59,942 )

Net cash provided by (used in) financing activities 5,515 ( 59,248 )

Effect of exchange rate changes on cash and cash equivalents ( 317 ) 185

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

Net loss ( 4,407 ) ( 4,407 )

Exercise of stock options 25,000 248 248

Issuance/Cancellation of restricted stock units 6,016 — —

Purchases of common stock under ESPP 104,106 1 646 647

Stock-based compensation 2,398 2,398

Other comprehensive income, net of tax 216 216

Balance at February 28, 2025 41,584,678 $ 385 $ 619,545 $ ( 423,147 ) $ ( 3,532 ) ( 613,847 ) $ ( 7,381 ) $ 185,870

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

Net loss ( 187,736 ) ( 187,736 )

Issuance/Cancellation of restricted stock units 49,701 ( 9 ) ( 9 )

Purchases of common stock under ESPP 150,426 2 701 703

Stock-based compensation 2,612 2,612

Other comprehensive income, net of tax 1,902 1,902

Balance at February 29, 2024 40,794,533 $ 385 $ 608,588 $ ( 381,755 ) $ ( 2,806 ) ( 370,000 ) $ ( 5,714 ) $ 218,698

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

4 unchanged sentences

CONSOLIDATED FINANCIAL STATEMENTS

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 Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three and nine months ended February 28, 2025 and February 29, 2024, the Consolidated Balance Sheet as of February 28, 2025, the Consolidated Statements of Cash Flows for the nine months ended February 28, 2025 and February 29, 2024, and the Consolidated Statements of Stockholders’ Equity for the nine months ended February 28, 2025 and February 29, 2024 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 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.

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 February 28, 2025 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three and nine months ended February 28, 2025 and February 29, 2024 include the accounts of AngioDynamics, Inc.

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

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PICCs and Midlines

Pursuant to an asset purchase agreement dated February 15, 2024 (the "Asset Purchase Agreement"), the Company completed the sale of the PICC and Midline businesses (the "Divestiture") to Spectrum Vascular ("Spectrum").

Total consideration received by the Company for the Divestiture in the third quarter of fiscal year 2024 was $ 34.5 million in cash and resulted in a pre-tax book gain of $ 6.7 million.

Pursuant to an asset purchase agreement dated February 15, 2024 (the "Spectrum Asset Purchase Agreement"), the Company completed the divestiture of its PICC and Midline businesses (the "Spectrum Divestiture") to Spectrum Vascular ("Spectrum").

Total consideration received by the Company for the Spectrum Divestiture in the third quarter of fiscal year 2024 was $ 34.5 million in cash and resulted in a pre-tax book gain of $ 6.7 million.

Included in the agreement is a $ 5.5 million earn-out related to the sales of divested products over a two-year period and a milestone payment of $ 5.0 million paid upon final transfer of the manufacturing to a third-party that Spectrum will pay to the Company upon achievement.

The Company and Spectrum entered into various agreements to facilitate the transition of the divested businesses to Spectrum, including a Transition Services Agreement and Contract Manufacturing Agreement.

The Company determined that the sale of the businesses 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 is not classified as discontinued operations.

The Company achieved the sales milestone related to the divested products in the third quarter of fiscal year 2025 and recorded a receivable of $ 5.5 million in "Earn-out receivable" on the Consolidated Balance Sheets which will be paid to the Company in the fourth quarter of fiscal year 2025.

The Company and Spectrum entered into various agreements to facilitate the transition of the divested businesses to Spectrum, including a Transition Services Agreement and Transition Manufacturing Agreement.

The Company determined that the divestiture of the businesses 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 is not classified as discontinued operations.

The following table summarizes the major classes of assets sold on the date of the sale:

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Dialysis and BioSentry

Pursuant to an asset purchase agreement dated June 8, 2023 (the "Asset Purchase Agreement"), the Company completed the sale of the dialysis and BioSentry tract sealant system biopsy businesses (the "Divestiture") to Merit Medical Systems, Inc.

Total consideration received by the Company for the Divestiture in the first quarter of fiscal year 2024 was $ 100.0 million in cash and resulted in a pre-tax book gain of $ 47.8 million.

The Company and Merit entered into various agreements to facilitate the transition of the divested businesses to Merit, including a Transition Services Agreement and Contract Manufacturing Agreement.

The Company determined that the sale of

Pursuant to an asset purchase agreement dated June 8, 2023 (the "Merit Asset Purchase Agreement"), the Company completed the divestiture of the dialysis and BioSentry tract sealant system biopsy businesses (the "Merit Divestiture") to Merit Medical Systems, Inc.

Total consideration received by the Company for the Merit Divestiture in the first quarter of fiscal year 2024 was $ 100.0 million in cash and resulted in a pre-tax book gain of $ 47.8 million.

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the businesses 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.

The Company and Merit entered into various agreements to facilitate the transition of the divested businesses to Merit, including a Transition Services Agreement and Contract Manufacturing Agreement.

The following table summarizes the major classes of assets sold on the date of the sale:

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Revenue Recognition

Under ASC 606, Revenue from Contracts with Customers , revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps:

Under ASC 606, Revenue from Contracts with Customers , revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that a Company determines are within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

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

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

Three Months Ended February 28, 2025 Three Months Ended February 29, 2024

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

2 unchanged sentences

Total $ 61,340 $ 10,664 $ 72,004 $ 62,342 $ 12,840 $ 75,182

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

Nine Months Ended February 28, 2025 Nine Months Ended February 29, 2024

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

3 unchanged sentences

Net Product Revenue

The Company's products consist of a wide range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and for use in oncology and surgical settings.

The Company's products consist of medical technology products focused on restoring healthy blood flow in the body's vascular system, expanding cancer treatment options and improving quality of life for patients.

The Company's products are generally used in minimally invasive, image-guided procedures.

1 unchanged sentence

The Company sells its products to its distributors and to end users, such as interventional radiologists, interventional cardiologists, vascular surgeons, urologists, interventional and surgical oncologists and critical care nurses.

Contracts and Performance Obligations

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Contracts and Performance Obligations

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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The Company provides certain customers with rebates and allowances that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized.

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

The Company establishes reserves for such amounts, which is included in "Accrued liabilities" 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.

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The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized.

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

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

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returns, including product recalls.

During the nine months ended February 28, 2025 and February 29, 2024, such product returns were not material.

Contract Balances with Customers

2 unchanged sentences

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 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 as deferred revenue in "Accrued liabilities" 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) Nov 30, 2024 May 31, 2024

(in thousands) Feb 28, 2025 May 31, 2024

Receivables $ 43,468 $ 43,610

1 unchanged sentence

Contract liabilities $ 262 $ 391

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.

During the nine months ended February 28, 2025, the Company had additions to contract liabilities of $ 0.2 million.

This was offset by $ 0.3 million in revenue that was recognized during the nine months ended February 28, 2025.

Costs to Obtain or Fulfill a Customer Contract

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Inventories consisted of the following:

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

(in thousands) Feb 28, 2025 May 31, 2024

Raw materials $ 29,094 $ 30,736

5 unchanged sentences

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

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

The total inventory reserve at February 28, 2025 and May 31, 2024 was $ 3.8 million and $ 3.3 million, respectively.

INTANGIBLE ASSETS

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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.

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.

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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.

Intangible assets consisted of the following:

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

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.

Amortization expense for the three months ended February 28, 2025 and February 29, 2024 was $ 2.6 million and $ 3.3 million, respectively.

Amortization expense for the nine months ended February 28, 2025 and February 29, 2024 was $ 7.7 million and $ 10.5 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) Nov 30, 2024 May 31, 2024

(in thousands) Feb 28, 2025 May 31, 2024

Payroll and related expenses $ 18,514 $ 15,920

4 unchanged sentences

Deferred warranties 347 460

TSA Payable 6,459 6,259

Transition service agreement payable 5,960 6,259

Rebates 514 412

5 unchanged sentences

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 1.7 % as of the second quarter of fiscal year 2025, as compared to 23.7 % for the same period in fiscal year 2024.

The estimated annual effective tax rate prior to discrete items was 1.9 % as of the third quarter of fiscal year 2025, as compared to 5.6 % 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 November 30, 2024.

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.

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 3, 2022 and November 14, 2023, the Company’s shareholders approved amendments 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.

As of February 28, 2025, there was a maximum of 4.0 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 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.

As of February 28, 2025, there was a maximum of 2.6 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended February 28, 2025 and February 29, 2024, share-based compensation expense was $ 2.4 million and $ 2.6 million, respectively.

For the nine months ended February 28, 2025 and February 29, 2024, share-based compensation expense was $ 8.1 million and $ 8.6 million, respectively.

During the nine months ended February 28, 2025 and February 29, 2024, 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 six months ended November 30, 2024 and 2023, the Company granted performance share units under the 2020 Plan to certain employees.

During the nine months ended February 28, 2025 and February 29, 2024, 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 November 30, 2024, there was $ 20.0 million of unrecognized compensation expense related to share-based payment arrangements.

As of February 28, 2025, there was $ 18.2 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 .

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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.

There were no share repurchases during the third quarter of fiscal year 2025.

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.

As of February 28, 2025, $ 13.3 million remained available for repurchase under the Repurchase Program.

EARNINGS PER SHARE

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 Feb 28, 2025 Feb 29, 2024

Basic 40,853 40,234 40,809 40,098

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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 $ 291.6 million as of November 30, 2024.

Total assets were $ 285.4 million as of February 28, 2025.

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

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Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 Feb 28, 2025 Feb 29, 2024

Med Tech net sales $ 31,341 $ 25,844 $ 90,863 $ 77,068

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 Feb 28, 2025 Feb 29, 2024

United States $ 61,340 $ 62,342 $ 183,499 $ 190,743

1 unchanged sentence

Total $ 72,004 $ 75,182 $ 212,340 $ 232,934

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.

For the three months ended February 28, 2025 and February 29, 2024, international sales as a percentage of total net sales were 14.8 % and 17.1 %, respectively.

For the nine months ended February 28, 2025 and February 29, 2024, international sales as a percentage of total net sales were 13.6 % and 18.1 %, 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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Fair Value Measurements using inputs considered as:

Fair Value at Nov 30, 2024

Fair Value at Feb 28, 2025

(in thousands) Level 1 Level 2 Level 3

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

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

There were no transfers between Level 1, 2 and 3 for the three and nine months ended February 28, 2025 and February 29, 2024.

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

Three Months Ended Nov 30, 2024

Three Months Ended Feb 28, 2025

(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 $ 4,960

Six Months Ended November 30, 2024

Change in present value of contingent consideration (1)

Balance, February 28, 2025

Nine Months Ended February 28, 2025

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

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Change in present value of contingent consideration (1)

Balance, November 30, 2024

Balance, February 28, 2025

(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.

5 unchanged sentences

The Company measures the initial liability and remeasures the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements, which is determined using a discounted cash flow model applied to projected net sales, using probabilities of achieving projected net sales and projected payment dates.

Projected net sales are based on internal projections and extensive analysis of the target market and the sales potential.

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

Projected net

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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:

sales are based on internal projections and extensive analysis of the target market and the sales potential.

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 February 28, 2025:

(in thousands) Fair Value Valuation Technique Unobservable Input Range

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Projected fiscal year of payment 2026

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.

At February 28, 2025, 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 final milestone associated with the contingent consideration was reached during the third quarter of fiscal year 2025 and will be paid during the first quarter of fiscal year 2026.

The Company determines if an arrangement is a lease at inception of the contract.

The Company has operating leases for buildings, primarily for office space, R&D, manufacturing and warehousing.

The Company has operating leases for buildings, primarily for office space, R&D and warehousing.

The Company has financing arrangement for manufacturing and distribution.

Financing Arrangement

On December 24, 2024, the Company entered into an agreement to sell 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 $ 5.2 million and $ 1.1 million, respectively.

The Company simultaneously entered into lease agreements with future lease payments of $ 4.6 million over seven years years for the Queensbury, NY facility and $ 0.4 million over three years years for the Glens Falls, NY facility.

Based on certain criteria, the transaction was accounted for as a financing arrangement, as it did not meet the criteria for a sale-leaseback.

As a result, the assets remain in "Property, plant and equipment, net" on the Consolidated Balance Sheets at their historical book value and are depreciated over the term of the lease agreements.

A financing arrangement was recorded in the amount of the net proceeds received.

The Company will recognize monthly rent as a reduction of the finance arrangement and interest expense, using the effective interest rate method.

No gain or loss was recognized related to the financing arrangement for the three and nine months ended February 28, 2025.

As of February 28, 2025, the carrying value of the financing arrangement was $ 6.3 million, of which $ 0.4 million was classified as "Other current liabilities" and $ 5.9 million was classified as "Other long-term liabilities" on the Consolidated Balance Sheets.

Interest expense associated with the financing arrangement was $ 0.1 million for the three and nine months ending February 28, 2025.

Remaining future cash payments related to the financing arrangement as of February 28, 2025 for each of the following fiscal years is:

(in thousands) Feb 28, 2025

Remainder of 2025 $ 200

2029 and thereafter 2,365

Total minimum liability payments $ 4,914

imputed interest ( 2,139 )

Total $ 2,775

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Operating Leases

Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

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

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

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

Current operating lease liabilities Other current liabilities 1,878 1,975

Non-current operating lease liabilities Other long-term liabilities 3,030 3,939

(in thousands) Balance Sheet Location Feb 28, 2025 May 31, 2024

Operating lease ROU assets Other assets $ 4,297 $ 5,804

Operating lease liabilities Other current liabilities $ 1,826 $ 1,975

Operating lease liabilities Other long-term liabilities $ 2,571 $ 3,939

Total lease liabilities $ 4,397 $ 5,914

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Weighted average discount rate 4.7 %

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

(in thousands) Nov 30, 2024

The maturities of the lease liabilities as of February 28, 2025 for each of the following fiscal years is:

(in thousands) Feb 28, 2025

Remainder of 2025 $ 514

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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.

During the three months ended February 28, 2025 and February 29, 2024, the Company recognized $ 0.7 million and $ 0.7 million of operating lease expense, respectively, which includes immaterial short-term leases.

During the nine months ended February 28, 2025 and February 29, 2024, the Company recognized $ 2.0 million and $ 1.9 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 Six Months Ended

(in thousands) Nov 30, 2024

Nov 30, 2023 Nov 30, 2024

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025

Feb 29, 2024 Feb 28, 2025

Cost of sales $ 230 $ 218 $ 691 $ 634

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General and administrative 280 338 878 998

Acquisition, restructuring and other items, net 18 — 18 —

$ 657 $ 650 $ 1,993 $ 1,904

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

Six Months Ended

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

Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024

Cash paid for amounts included in the measurement of lease liabilities

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Appellate briefing is closed, but an argument date has not yet been set.

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.

party admitted any liability and the agreement contains mutual covenants not to sue and releases.

As of February 28, 2025, there was $ 3.5 million payable to BD recorded in other current liabilities and $ 8.9 million recorded in other long-term liabilities.

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.

As of February 28, 2025, the Company is defending approximately 120 product liability claims involving the Company's port products (collectively, the “Port Product Claims”).

The Port Product Claims are consolidated for pretrial proceedings in the United States District Court for the Southern District of California.

The Port Product Claims generally seek damages for personal injury allegedly resulting from use of the products.

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 Feb 28, 2025 Feb 29, 2024

$ — $ 23,314 $ 406 $ 30,453

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3,130 5,426 11,820 6,115

Intangible and other asset impairment — 6,260 — 6,260

Transition service agreement (3)

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619 553 1,926 1,608

427 102 1,301 1,055

Total $ 3,286 $ 35,367 $ 13,465 $ 44,767

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

For the three and nine months ended February 29, 2024, a $ 19.3 million settlement expense was recorded as a result of the Settlement Agreement that was entered into between the Company and BD.

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

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(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.

(5) Included in the $ 1.6 million in other for the nine months ended February 29, 2024 is $ 0.9 million of deferred financing fees that were written-off in conjunction with the divestiture of the Dialysis and BioSentry businesses and concurrent extinguishment of the debt.

Restructuring

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(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.

The Company recorded restructuring charges related to the Plan during the three and nine months ended February 28, 2025 of $ 3.1 million and $ 11.8 million, respectively.

Total restructuring charges recorded to date are $ 21.3 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 and six months ended November 30, 2024 :

Three Months Ended Nov 30, 2024

The table below presents the restructuring reserve for the three and nine months ended February 28, 2025 :

Three Months Ended Feb 28, 2025

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

Balance at November 30, 2024 $ 1,131 $ 2,004 $ 448 $ — $ — $ 140 $ 3,723

Charges 711 1,045 320 663 18 373 3,130

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Cash payments ( 1,296 ) ( 1,366 ) ( 600 ) — ( 18 ) ( 270 ) ( 3,550 )

Balance at November 30, 2024

Balance at February 28, 2025

$ 546 $ 1,683 $ 168 $ — $ — $ 243 $ 2,640

Six Months Ended Nov 30, 2024

Nine Months Ended Feb 28, 2025

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

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Cash payments ( 1,296 ) ( 4,189 ) ( 1,702 ) — ( 46 ) ( 841 ) ( 8,074 )

Balance at November 30, 2024

Balance at February 28, 2025

$ 546 $ 1,683 $ 168 $ — $ — $ 243 $ 2,640

ACCUMULATED OTHER COMPREHENSIVE LOSS

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

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 )

Other comprehensive income, net of tax 617

Net other comprehensive income $ 617

Balance at November 30, 2024

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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Recently Issued Accounting Pronouncements - Not Yet Applicable or Adopted

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Standard Description Effective Date Effect on the Consolidated Financial Statements

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Improvements to Income Tax Disclosures

This ASU improves the income tax disclosure requirements on an annual basis by (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

This ASU improves the income tax disclosure requirements on an annual basis by requiring the Company to:

(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

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.

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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.

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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