What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-07-18 compared with 2024-07-25 · 134 added, 172 removed, 194 unchanged (61% of the section changed)

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Company and Market

AngioDynamics is a leading and transformative medical technology company focused on restoring healthy blood flow in the body's vascular system, expanding cancer treatment options and improving quality of life for patients.

AngioDynamics is a dynamic, diversified medical technology company committed to expanding treatment options and improving patient outcomes and quality of life by focusing on cardiovascular disease and cancer.

Our execution strategy is built on innovative R&D, clinical and regulatory pathway expansion and customer centric sales performance.

We design, manufacture and sell 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.

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We sell our products in the United States primarily through a direct sales force, and outside the U.S.

through a combination of direct sales and distributor relationships.

mainly through distributor relationships.

Our end users include interventional radiologists, interventional cardiologists, vascular surgeons, urologists, interventional and surgical oncologists and critical care nurses.

We expect our businesses to grow in both sales and profitability by expanding geographically, penetrating new markets, introducing new products and increasing our presence internationally.

On June 8, 2023, the Company completed the sale of the dialysis and BioSentry businesses to Merit Medical Systems, Inc.

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

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

On June 8, 2023 and in connection with the completion of the Divestiture, the Company repaid all amounts outstanding under its existing Credit Agreement, and as a result, the Credit Agreement was extinguished.

On January 5, 2024, the Company announced a restructuring of its manufacturing footprint and a shift to an outsourced model (the "Plan").

This Plan is intended to 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 and will allow the Company to more effectively compete in chosen markets and fundamentally change its corporate gross margin profile.

On February 15, 2024, the Company completed the sale of its PICC and Midline businesses to Spectrum Vascular.

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

Total consideration received by the Company for the Divestiture 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.

In the third quarter of fiscal year 2024, the Company concluded that the sustained decline in our stock price was a triggering event for the Med Tech reporting unit.

The Company utilized the income approach to determine the fair value of the remaining Med Tech reporting unit.

Based on the results of this evaluation, the Company recorded a goodwill impairment charge of $159.5 million for the quarter ended February 29, 2024 to write down the carrying value of the Med Tech reporting unit to fair value.

On March 31, 2024, the Company and BD entered into a Settlement Agreement as described in Note 17 "Commitments and Contingencies" set forth in the Notes to our consolidated financial statements in this Annual Report on Form 10-K.

The Company will make a one-time lump sum payment to BD in the amount of $7.0 million, $3.0 million of which was paid within 5 business days of execution of the Settlement Agreement, and the remainder of which will be payable in installments over the 12 month period 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 AngioDynamics’ port products exceed the minimum payment.

The parties will participate in the pending appeal before the Federal Circuit of the case titled C.R.

and Bard Peripheral Vascular, Inc.

AngioDynamics, Inc.

15-00218–JFB;

and CAFC appeal No.

23-2056) and a contingent payment of $3.0 million will be due from AngioDynamics 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.

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

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

As of May 31, 2024, the present value of the lump sum and minimum annual payments of $19.4 million was recorded in "Acquisition, restructuring and other items, net" on the accompanying consolidated statements of operations and a long-term asset of $1.2 million, other current liabilities of $5.5 million and other long-term liabilities of $12.1 million was recorded on the consolidated balance sheets.

The current macroeconomic environment continues to impact our business and may continue to pose future risks.

The Company's ability to manufacture products, the reliability of our supply chain, labor shortages, backlog, inflation (including the cost and availability of raw materials, direct labor and shipping) and tariffs have impacted our business, trends that may continue.

Accordingly, management continues to evaluate the Company’s liquidity position, communicate with and monitor the actions of our customers and suppliers, and review our near-term financial performance.

On January 5, 2024, the Company announced a restructuring to optimize its manufacturing efficiency, capabilities and footprint (the "Plan").

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 modified Plan is still expected to generate $15.0 million in annual cost savings starting in fiscal year 2027.

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 year ended May 31, 2025, the Company repurchased 243,847 shares of common stock in the open market at an aggregate cost of $1.7 million under the Repurchase Program.

As of May 31, 2025, $13.3 million remained available for repurchase under the Repurchase Program.

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 for the Queensbury, NY facility and $0.4 million over three years for the Glens Falls, NY facility.

On May 28, 2025, the Company entered into a new Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

The Credit Agreement has a two-year maturity and provides for a $25.0 million secured revolving credit facility (the "Revolving Facility"), which is subject to a borrowing base comprised of certain working capital assets of the Company.

As of May 31, 2025, there is no outstanding balance on the Revolving Facility.

In evaluating the operating performance of our business, management focuses on revenue, gross margin, operating income, earnings per share and cash flow from operations.

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• Revenue decreased by 3.8% to $292.5 million

• Med Tech growth of 10.0% and Med Device decrease of 18.4%

• Gross profit decreased by 50 bps to 50.9%

• Net loss increased by $131.9 million to $184.3 million

• Loss per share increased by $3.26 to a loss of $4.59

• Cash flow from operations decreased by $28.2 million resulting in cash used in operations of $28.2 million

For the year ended May 31, 2024, the decrease in revenue is partially due to the sale of the PICCs, Midline, dialysis and BioSentry businesses, along with the discontinuation of the RadioFrequency Ablation and Syntrax product lines, the total of which impacted sales by $48.4 million compared to the year ended May 31, 2023.

Our Med Tech business, comprised of Auryon, the thrombus management platform and NanoKnife grew 10.0% in fiscal year 2024.

The growth in Auryon and NanoKnife was partially offset by continued softness in the thrombus management platform.

Our Med Device business decreased 18.4% in fiscal year 2024 driven mainly by the sale of the PICCs, Midlines, dialysis and BioSentry businesses along with the discontinuation of the RadioFrequency Ablation product lines.

• Med Tech growth of 19.0% and Med Device declined by 16.0%

• Gross margin increased by 300 bps to 53.9%

• Net loss decreased by $150.4 million to $34.0 million

• Loss per share decreased by $3.76 to a loss of $0.83

• Cash flow from operations increased by $18.0 million resulting in cash used in operations of $10.1 million

For the year ended May 31, 2025, the decrease in revenue is due to the divestiture of the PICCs, Midline, dialysis and BioSentry businesses, along with the discontinuation of the RadioFrequency Ablation and Syntrax product lines, the total of which impacted sales by $33.4 million compared to the year ended May 31, 2024.

Our Med Tech business, comprised of Auryon, the thrombus management platform and NanoKnife grew 19.0% in fiscal year 2025 was driven by growth in growth in Auryon and the thrombus management platform, while Nanoknife sales remained consistent year over year.

Our Med Device business decreased 16.0% in fiscal year 2025 driven mainly by the divestiture of the PICCs, Midlines, dialysis and BioSentry businesses along with the discontinuation of the RadioFrequency Ablation product lines.

Strategic Initiatives to Drive Growth

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 continue to be driven by our high technology products including Auryon, Mechanical Thrombectomy (which includes AngioVac and AlphaVac) and NanoKnife.

The Company is focused on its Med Tech segment which is committed to expanding treatment options and improving patient outcomes and quality of life by focusing on cardiovascular disease and cancer.

Our execution strategy is built on innovative R&D, clinical and regulatory pathway expansion and customer centric sales performance.

Our investments in our high technology products including Auryon, Mechanical Thrombectomy (which includes AngioVac and AlphaVac) and NanoKnife, will provide us access to larger and faster growing markets.

Throughout the year, we introduced strategic moves designed to streamline our business, improve our overall business operations and position ourselves for growth.

Those initiatives included:

• Product development process.

The Company continued its disciplined product development process which is intended to improve the Company’s ability to bring new products to market.

This included:

◦ Pathway expansion for Auryon in arterial thrombectomy and the launch of the Auryon XL radial catheter;

◦ 510(k) clearance and CE mark for the use of AlphaVac F18 85 System to treat pulmonary embolism;

◦ Completed enrollment of patients in the PRESERVE study for the use of NanoKnife in the prostate in the first quarter.

• Value Creation.

To create value and drive future growth, the Company plans to practice dispassionate portfolio optimization and continue to focus on areas of compelling unmet needs including those that are patient-centric and evidenced-based.

In addition, the Company continues to pursue targeted global expansion opportunities.

• Innovative R&D and Clinical and Regulatory Pathway Expansion.

The Company continued its disciplined product development process which is intended to improve the Company’s ability to bring new products to market and achieve clinical and regulatory pathway expansion.

◦ Received CE mark approval in Europe for Auryon;

◦ Received CPT Category I Codes for Irreversible Electroporation (IRE), the primary method of action for the NanoKnife System, for the treatment of lesions in the prostate and liver, effective January 2026;

◦ Received FDA 510(k) clearance for NanoKnife Prostate Tissue Ablation;

◦ Received CPT Category I Codes for Irreversible Electroporation (IRE), the primary method of action for the NanoKnife System, for the treatment of the pancreas, effective January 2027;

◦ Published APEX-AV trial results in the Journal of the Society for Cardiovascular Angiography & Interventions demonstrating the safety and efficacy of the AlphaVac F1885 System;

◦ Initiated RECOVER-AV Clinical Trial in Europe for AlphaVac;

◦ Initiated the AMBITION BTK RCT and Registry to generate definitive clinical evidence supporting the use of the Auryon Atherectomy System in treating below the knee lesions in patients with critical limb ischemia.

• Customer Centric Sales Performance.

To create value and drive future growth, the Company is focused on ensuring that the sales team is appropriately trained on how to market the products to our customers and that our customers are receiving the appropriate training and exposure to our products.

This included:

◦ The sale of the dialysis and BioSentry businesses to Merit Medical Systems, Inc.

on June 8, 2023;

◦ The sale of the PICC and Midline businesses to Spectrum Vascular on February 15, 2024;

◦ The discontinuation of the RadioFrequency Ablation and Syntrax product lines as of February 29, 2024.

◦ Continued focus on training of the sales teams;

◦ Conducted targeted physician trainings and symposiums both in the U.S.

and internationally throughout the year.

• Focused Resource Deployment.

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This included:

◦ The announcement on January 5, 2024 to restructure the manufacturing footprint and a shift to an outsourced model which will transfer all product manufacturing processes to third-party manufacturers to allow the Company to more effectively compete in chosen markets and fundamentally change its corporate gross margin profile.

◦ The announcement to restructure the manufacturing footprint, which includes maintaining a presence in Queensbury, NY for select products, customer service, logistics, shipping, quality and regulatory operations, and shifting all other products to an outsourced model utilizing third-party manufacturers to allow the Company to more effectively compete in chosen markets and fundamentally change its corporate gross margin profile.

The restructuring activities are expected to be completed in the third quarter of fiscal year 2026 and are expected to generate $15.0 million in annual cost savings starting in fiscal year 2027.

Critical Accounting Policies and Use of Estimates

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Revenue Recognition

Under ASC 606, 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, the Company performs the following five steps:

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

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Transaction prices of products are typically based on contracted rates.

Product revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer, net of any variable consideration described below.

Product revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer, net of any variable consideration as described below.

If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

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The Company has standard pricing for its products and determines standalone selling prices based on the price at which the performance obligation is sold separately.

Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which occurs at a point in time, and may be upon shipment from the Company’s manufacturing site or delivery to the customer’s named location, based on the contractual shipping terms of a contract.

In determining whether control has transferred, the Company considers if there is a present right to payment from the customer and when physical possession, legal title and risks and rewards of ownership have transferred to the customer.

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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.

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

Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue.

Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established for discounts, returns, rebates and allowances that are offered within contracts between the Company and its customers.

These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a contra asset.

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.

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.

Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established for discounts, product returns, rebates and allowances that are offered within contracts between the Company and its customers.

The Company generally offers customers a limited right of return.

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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 year ended May 31, 2024, such product returns were not material.

Discounts and product returns are based on amounts earned or to be claimed on the related sales and are classified as a contra asset.

During the years ended May 31, 2025, 2024 and 2023, such product returns were not material.

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 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.

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

A receivable is generally recognized in the period the Company ships the product.

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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 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.

Inventories are stated at the lower of cost or net realizable value based on the first-in, first-out cost method and consist of raw materials, work in process and finished goods.

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Inventories are written off against the reserve when they are physically disposed.

Acquisitions and Contingent Consideration

The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values.

The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company.

The Company generally values the identifiable intangible assets acquired using a discounted cash flow model.

The significant estimates used in valuing certain of the intangible assets include, but are not limited to:

future expected cash flows of the asset, discount rates to determine the present value of the future cash flows, attrition rates of customers, royalty rates and expected technology life cycles.

The Company also estimates the useful lives of the intangible assets based on the expected period over which the Company anticipates generating economic benefit from the asset.

The Company’s estimates of fair value are based on assumptions believed to be reasonable at that time.

If management made different estimates or judgments, material differences in the fair values of the net assets acquired may result.

Certain of the Company’s business combinations involve potential payment of future consideration that is contingent upon the achievement of certain product development milestones and/or contingent on the acquired business reaching certain performance milestones.

The Company records contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability weighted future cash flows, discounted back to present value.

The fair value of contingent consideration is measured using projected payment dates, discount rates, probabilities of payment, and projected revenues (for revenue-based considerations).

Projected revenues are based on the Company’s most recent internal operational budgets and long-range strategic plans.

The discount rate used is determined at the time of

measurement in accordance with accepted valuation methodologies.

Changes in projected revenues, probabilities of payment, discount rates, and projected payment dates may result in adjustments to the fair value measurements.

Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized as income or expense within operating expenses in the Consolidated Statements of Operations.

Contingent consideration payments made soon after the acquisition date are classified as investing activities in the Consolidated Statements of Cash Flows.

Contingent consideration payments not made soon after the acquisition date that are related to the acquisition date fair value are reported as financing activities in the Consolidated Statements of Cash Flows, and amounts paid in excess of the original acquisition date fair value are reported as operating activities in the Consolidated Statements of Cash Flows.

Goodwill and Intangible Assets

Intangible assets other than goodwill and in process research and development ("IP R&D") are amortized over their estimated useful lives, which range between two to eighteen years, on a straight-line basis over the expected period of benefit.

Intangible Assets

Intangible assets are amortized over their estimated useful lives, which range between two to eighteen years, on a straight-line basis over the expected period of benefit.

The Company periodically reviews the estimated useful lives of 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 may not be recoverable.

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If an intangible asset 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.

Goodwill is not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination.

Goodwill and intangible assets have been recorded at either incurred or allocated cost.

Allocated costs were based on respective fair market values at the date of acquisition.

For goodwill, the impairment test requires a comparison of the estimated fair value of each reporting unit to which the goodwill is assigned to the carrying value of the assets and liabilities of those reporting units.

The determination of reporting units also requires management judgment.

The Company considers whether a reporting unit exists within a reportable segment based on the availability of discrete financial information.

The Company operates as two operating segments with two reporting units and consequently evaluates goodwill for impairment based on an evaluation of the fair value of each reporting unit.

If the carrying value of the reporting units exceed the fair value, the carrying value is reduced to its fair value through an adjustment to the goodwill balance, resulting in an impairment charge.

As detailed in Note 9, "Goodwill and Intangible Assets" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K, the Company recorded a goodwill impairment loss of $159.5 million for the year ended May 31, 2024 as the fair value of the Med Tech reporting unit was less than its carrying value.

The Company recorded an impairment loss of $14.5 million for the year ended May 31, 2023 as the fair value of the Med Device reporting unit was less than its carrying value.

Results of Operations for the years ended May 31, 2025 and 2024

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• Increased Auryon sales of $9.8 million;

• Increased NanoKnife sales of $5.7 million, which was driven by both NanoKnife disposable and capital sales, which increased $2.5 million and $3.2 million, respectively, due to increased case volume in both the U.S and international markets;

• Decrease in the thrombectomy platform of $2.4 million, which was driven by softness in the mechanical thrombectomy platform in AngioVac, AlphaVac and Thrombolytic sales of $1.4 million, $0.4 million and $0.6 million, respectively.

• Decreased sales of Syntrax of $0.4 million due to the discontinuation of this product line as of February 29, 2024;

• Increased sales of the thrombus management platform of $10.9 million, which was driven by increases in AngioVac, AlphaVac and thrombolytic sales of $5.8 million, $4.0 million and $1.1 million, respectively;

• NanoKnife sales remained consistent year over year, and was comprised of increased NanoKnife disposable sales of $1.7 million offset by decreased capital sales of $1.7 million.

The Med Device business net sales decreased $31.7 million for the year ended May 31, 2025 compared to the prior year.

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• Decreased sales of RadioFrequency Ablation of $2.2 million due to the discontinuation of this product line as of February 29, 2024;

• Increased sales of Ports, Core and Venous of $2.5 million, $2.0 million and $0.9 million, respectively.

This increase was partially offset by decreased sales of Oncology and Microwave products of $1.2 million and $0.4 million, respectively.

• Increased sales of Core and Venous of $1.9 million and $0.9 million, respectively.

This increase was partially offset by decreased sales of Ports, Microwave and other Oncology products of $0.3 million, $0.8 million and $0.5 million, respectively.

Year ended May 31,

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Med Tech $ 78,515 $ 67,198 $ 11,317

Gross profit % of sales 63.2 % 64.1 %

Gross margin % of sales 62.0 % 63.2 %

Med Device $ 79,190 $ 87,500 $ (8,310)

Gross profit % of sales 44.3 % 46.4 %

Gross margin % of sales 47.7 % 44.3 %

Total $ 157,705 $ 154,698 $ 3,007

Gross profit % of sales 50.9 % 51.4 %

Gross profit - Gross profit consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.

Total Company gross profit decreased by $19.5 million compared to the prior year.

Gross margin % of sales 53.9 % 50.9 %

Gross margin - Gross margin consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.

Total Company gross margin increased by $3.0 million compared to the prior year.

The change from the prior year was primarily driven by:

• The sale of the PICCs, Midline, dialysis and BioSentry businesses, which negatively impacted gross profit by $23.9 million;

• Sales volume and price mix, which positively impacted gross profit by $8.4 million;

• Production volume and other incentives which positively impacted gross profit by $2.2 million;

• Sales mix, inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $5.0 million;

• The divestiture of the PICCs, Midline, dialysis and BioSentry businesses, which negatively impacted gross margin by $9.2 million;

• Sales volume, price and product mix, which positively impacted gross margin by $19.9 million;

• Other incentives and a prior year supplier recall, which positively impacted gross profit by $1.7 million;

• Production volume and other costs which negatively impacted gross margin by $1.5 million;

• Tariffs, along with inflationary costs on raw materials, labor shortages, freight and other costs, which negatively impacted gross margin by $1.6 million and $3.6 million, respectively;

• Incremental depreciation on placement units of $2.6 million.

The Med Tech segment gross profit increased by $5.2 million compared to the prior year.

The Med Tech segment gross margin increased by $11.3 million compared to the prior year.

The change from the prior year was primarily driven by:

• Sales volume and price mix, which positively impacted gross profit by $5.5 million;

• Production volume and other incentives which positively impacted gross profit by $1.6 million;

• Sales mix, which negatively impacted gross profit by $0.9 million;

• Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.2 million;

• Sales volume, price and product mix, which positively impacted gross margin by $17.2 million;

• Production volume and other incentives which negatively impacted gross margin by $1.5 million;

• Tariffs, along with inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross margin by $1.1 million and $0.4 million, respectively;

• The abandonment of the Syntrax product line, which negatively impacted gross margin by $0.2 million;

• Incremental depreciation on placement units of $2.7 million.

The Med Device segment gross profit decreased by $24.8 million compared to the prior year.

The Med Device segment gross margin decreased by $8.3 million compared to the prior year.

The change from the prior year was primarily driven by:

• The sale of the PICCs, Midline, dialysis and BioSentry businesses, which negatively impacted gross profit by $23.9 million;

• Sales volume and price mix, which positively impacted gross profit by $3.3 million;

• Production volume and other incentives which positively impacted gross profit by $0.6 million;

• Sales mix, which negatively impacted gross profit by $3.6 million;

• Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $1.0 million;

• The divestiture of the PICCs, Midline, dialysis and BioSentry businesses, which negatively impacted gross margin by $9.0 million;

• Price and product mix, which positively impacted gross margin by $3.6 million;

• Other incentives and a prior year supplier recall, which positively impacted gross profit by $2.7 million;

• Sales volume and production volume which negatively impacted gross margin by $1.4 million;

• Tariffs, along with inflationary costs on raw materials, labor shortages and freight and other costs, which negatively impacted gross margin by $0.5 million and $3.7 million, respectively;

• Incremental depreciation on placement units of $0.1 million.

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Research and development expense - Research and development (“R&D”) expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, manage clinical, regulatory and medical affairs.

R&D expense increased $1.6 million compared to the prior year.

R&D expense decreased $5.3 million compared to the prior year.

The change from the prior year was primarily driven by:

• The timing of certain projects and clinical spend associated with the ongoing clinical trials, which decreased R&D expense by $0.4 million;

• Compensation and benefits expenses, which increased $2.0 million.

• The timing of certain projects, clinical spend and other costs associated with the ongoing clinical trials, which decreased R&D expense by $5.1 million;

• Compensation and benefits expenses, which decreased $0.2 million.

Sales and marketing expense - Sales and marketing (“S&M”) expense consists primarily of salaries, commissions, travel and related business expenses, attendance at medical society meetings, product promotions and marketing activities.

S&M expense decreased by $1.4 million compared to the prior year.

S&M expense increased by $0.3 million compared to the prior year.

The change from the prior year was primarily driven by:

• Compensation and benefits expense, which increased by $1.1 million;

• Travel, meeting, tradeshow and other selling expenses, which decreased $2.5 million.

• Trade shows, subscriptions and other marketing expenses, which increased $1.5 million;

• Consulting and other selling expenses, which increased $0.7 million;

• Compensation and benefits expense, which decreased by $2.0 million.

General and administrative expense - General and administrative (“G&A”) expense includes executive management, finance, information technology, human resources, business development, legal, and the administrative and professional costs associated with those activities.

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• Compensation and benefits expense, which increased $2.1 million;

• Other outside consultant spend for legal and IT which increased $0.4 million.

• Other outside consultant spend, which increased $0.8 million;

• Depreciation and other corporate expenses, which decreased $2.0 million.

Year ended May 31,

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Acquisition, restructuring and other items, net $ 15,620 $ 53,182 $ (37,562)

Other income (expense) $ 797 $ (3,256) $ 4,053

Other income $ 5,922 $ 797 $ 5,125

Amortization of intangibles - Represents the amount of amortization expense that was taken on intangible assets held by the Company.

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Goodwill impairment - Represents the impairment charge taken on goodwill.

• The Company recorded a non-cash goodwill impairment charge of $159.5 million for the year ended May 31, 2024 as the fair value of the Med Tech reporting unit was less than its carrying value compared to a $14.5 million goodwill impairment charge for the year ended May 31, 2023 as the fair value of the Med Device reporting unit was less than its carrying value.

• The Company recorded a non-cash goodwill impairment charge of $159.5 million for the year ended May 31, 2024 as the fair value of the Med Tech reporting unit was less than its carrying value.

Change in fair value of contingent consideration - Represents changes in contingent consideration driven by changes to estimated future payments on earn-out liabilities created through acquisitions and amortization of present value discounts on long-term contingent consideration.

• The change in the fair value for the year ended May 31, 2025 is related to the Eximo contingent consideration and the increased probability of achieving the revenue milestones.

The second revenue milestone was achieved in April 2024 and was paid in the fourth quarter of fiscal year 2024.

The final milestone associated with the contingent consideration was reached during the third quarter of fiscal year 2025 and was paid during the fourth quarter of fiscal year 2025.

Acquisition, restructuring and other items, net - Acquisition, restructuring and other items, net represents costs associated with mergers and acquisitions, restructuring expenses, legal costs that are related to litigation that is not in the ordinary course of business, legal settlements and other one-time items.

Acquisition, restructuring and other items, net increased by $37.5 million compared to the prior year.

Acquisition, restructuring and other items, net decreased by $37.6 million compared to the prior year.

The change from the prior year was primarily driven by:

• Legal expense, related to litigation that is outside of the normal course of business, which increased $25.0 million and was driven by the $19.3 million settlement between the Company and BD;

• Legal expense, related to litigation that is outside of the normal course of business, which decreased $34.2 million and was driven by the $19.3 million settlement between the Company and BD in the prior year;

• Mergers and acquisitions expense, which increased $0.3 million;

• Plant closure expense, related to the restructuring of our manufacturing footprint which was announced on January 5, 2024, which increased $4.3 million;

• An impairment of $3.4 million on the Syntrax product technology intangible and fixed assets and an inventory write-off of $2.9 million was taken in the third quarter of fiscal year 2024 related to the abandonment of the Syntrax and RF product lines;

• Transaction services agreements that were entered into as a result of the sale of the PICCs, Midline, dialysis and BioSentry businesses.

The Company invoiced Spectrum $0.6 million for the year ended May 31, 2024.

The Company invoiced Merit Medical Systems, Inc.

$0.5 million for the year ended May 31, 2024;

• Transaction services agreements that were entered into as a result of the divestiture of the PICCs, Midline, dialysis and BioSentry businesses.

The increase in the fees invoiced was $0.7 million;

• Manufacturing relocation expense related to the move of certain manufacturing lines from Queensbury, New York to a third party, which decreased $0.6 million;

• Other expenses, mainly severance associated with organizational changes, which increased $2.0 million;

• The payment to the Israeli Innovation Authority of $3.5 million related to grant funds that were provided to Eximo to develop the Auryon laser prior to the acquisition in the second quarter of fiscal year 2020.

These grant funds were fully repaid in the first quarter of fiscal year 2023 to satisfy the obligation which was otherwise being paid as a royalty based on a percentage of sales.

• Other expenses, mainly severance associated with organizational changes, which decreased $0.4 million.

Other income (expense) - Other expense includes interest income and expense, foreign currency impacts and bank fees.

• The change in other income and expe nse of $4.1 million compared to the prior year, is primarily due to decreased interest ex pense of $2.5 million and increased interest income of $1.6 million.

Other income, net increased by $5.1 million compared to the prior year.

The change from the prior year was primarily driven by:

• The Company achieved the $5.5 million sales milestone related to divested products in the third quarter of fiscal year 2025;

• Unrealized foreign currency fluctuations, which increased $0.2 million;

• Interest income, which decreased $0.6 million compared to the prior year.

Income Tax Benefit

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net deferred tax assets as of May 31, 2025.

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

The Company will continue to assess the level

of the valuation allowance required.

If sufficient positive evidence exists in future periods to support a release of some or all of the valuation allowance, such a release would likely have a material impact on the Company’s results of operations.

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Our cash and cash equivalents totaled $55.9 million as of May 31, 2025, compared with $76.1 million as of May 31, 2024.

As of May 31, 2024 there was no outstanding debt as the Credit Agreement was extinguished in connection with the Divestiture (see Note 12 "Long-Term Debt" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K).

As of May 31, 2023, total debt outstanding related to the Credit Agreement was $50.0 million.

The fair value of the contingent consideration liability as of May 31, 2024 was $4.7 million.

As of May 31, 2025 and 2024 the Company did not have any outstanding debt.

The table below summarizes our cash flows for the years ended May 31, 2025 and 2024:

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(in thousands) 2025 2024

Cash provided by (used in):

Cash (used in) provided by:

Operating activities $ (10,128) $ (28,158)

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During the years ended May 31, 2025 and 2024, cash flows consisted of the following:

Cash (used in) provided by operating activities:

Cash used in operating activities:

Years ended May 31, 2025 and 2024:

• Net loss of $184.3 million and $52.4 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization, gain on the divestiture and related expenses, goodwill impairment and stock-based compensation, along with the changes in working capital below, contributed to cash used in operations of $28.2 million for the year ended May 31, 2024 and cash provided by operations of $0.1 million for the year ended May 31, 2023;

• Net loss of $34.0 million and $184.3 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization, gain on the divestiture and related expenses, goodwill impairment and stock-based compensation, along with the changes in working capital below, contributed to cash used in operations of $10.1 million and $28.2 million for the years ended May 31, 2025 and 2024, respectively;

• For the year ended May 31, 2025, working capital was unfavorably impacted by decreased accounts payable and accrued liabilities and inventory on hand of $15.9 million and $1.3 million, respectively.

This was partially offset by decreased prepaid expenses of $3.1 million;

• For the year ended May 31, 2024, working capital was unfavorably impacted by increased prepaid expenses and inventory on hand of $11.6 million and $9.4 million, respectively.

This was partially offset by decreased accounts receivable and increased accounts payable and accrued liabilities of $7.9 million and $27.5 million, respectively.

• For the year ended May 31, 2023, working capital was unfavorably impacted by increased accounts receivable, inventory on hand and prepaids of $1.3 million and $8.2 million, respectively.

This was partially offset by decreased prepaids and increased accounts payable and accrued liabilities of $0.3 million and $2.1 million, respectively.

Cash provided by (used in) investing activities:

Cash (used in) provided by investing activities:

Years ended May 31, 2025 and 2024:

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• $5.7 million and $5.0 million, respectively, of cash was used for Auryon placement and evaluation unit additions;

• $134.5 million of cash was received for the divestiture of the PICCs, Midline, dialysis and BioSentry businesses;

• $3.3 million and $0.5 million, respectively, of cash was used for the acquisition of exclusive licenses.

Cash (used in) provided by financing activities:

• $134.5 million of cash was received for the divestiture of the PICCs, Midline, dialysis and BioSentry businesses in fiscal year 2024;

• $3.3 million of cash was used for the acquisition of exclusive licenses in fiscal year 2024.

Cash provided by (used in) financing activities:

Years ended May 31, 2025 and 2024:

• $50.0 million prepayment of the Credit Agreement in connection with the completion of the dialysis and BioSentry divestiture in fiscal year 2024;

• $70.0 million in proceeds on long-term debt less the repayment of $45.0 million associated with the new Credit Agreement in the first quarter of fiscal year 2023;

• $0.8 million of deferred financing costs associated with the then new Credit Agreement in the first quarter of fiscal year 2023;

• $15.0 million of contingent consideration payments made in fiscal year 2024;

• $6.3 million of proceeds from financing arrangements offset with $0.1 million of principal payments on the financing arrangements in fiscal year 2025;

• $1.7 million of cash was used for the repurchase of common shares in fiscal year 2025;

• $5.0 million and $15.0 million, respectively, of contingent consideration payments;

• $50.0 million repayment of the Credit Agreement in connection with the completion of the dialysis and BioSentry divestiture in fiscal year 2024;

• $0.9 million and $0.8 million, respectively, of proceeds from stock option and ESPP activity.

On June 8, 2023 and in connection with the completion of the sale of the dialysis and BioSentry divestiture, the Company repaid all amounts outstanding under its existing Credit Agreement, and as a result, the Credit Agreement was extinguished.

Pursuant to the terms of the Credit Agreement, AngioDynamics had the option to repay this facility prior to the maturity date without penalty.

On May 28, 2025, the Company entered into a new Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

As of May 31, 2025, there is no outstanding balance on the Revolving Facility.

We believe that our current cash balance, together with cash generated from operations and access to our Revolving Facility, will provide sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months.

If we seek to make acquisitions of other businesses or technologies in the future for cash, we may require external financing.

Our contractual obligations as of May 31, 2025 are set forth in the table below (in thousands).

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$ 4,580 $ 2,277 $ 1,788 $ 515 $ —

Purchase obligations (2)

2,946 2,946 — — —

Acquisition-related future obligations (3)

5,000 5,000 — — —

Finance leases 4,714 800 1,549 2,365 —

Royalties 32,380 3,620 7,240 7,240 14,280

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(1) Operating leases include short-term leases that are not recorded on our Consolidated Balance Sheets under ASU No.

(2) The inventory purchase obligations are not reflected on our Consolidated Balance Sheets under accounting principles generally accepted in the United States of America.

(3) Acquisition-related future obligations include scheduled minimum payments and contingent payments based upon achievement of performance measures or milestones such as sales or profitability targets, the achievement of research and development objectives or the receipt of regulatory approvals.

The amount represents the undiscounted value of contingent liabilities recorded on the balance sheet.

Timing of payments are as contractually scheduled, or where contingent, the Company's best estimate of payment timing.

Results of Operations for the years ended May 31, 2024 and 2023

For management discussion and analysis of our 2023 financial results and liquidity compared with 2022, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended May 31, 2023 filed on August 3, 2023.

For management discussion and analysis of our 2024 financial results and liquidity compared with 2023, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended May 31, 2024 filed on July 25, 2024.

Recent Accounting Pronouncements

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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-K

Item 7. Management’s Discussion and Analysis