Angiodynamics, Inc. · NASDAQ:ANGO
Angiodynamics — Investor Day (April 2017)
60 slides from Angiodynamics's investor day presentation, Apr 6, 2017
Slide 1: AngioDynamics 2017 Investor Day
AngioDynamics 2017 Investor Day April 6, 2017 ® angiodynamics
Slide 2: Forward-Looking Statement
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Slide 3: The Path to Value Creation
The Path to Value Creation Jim Clemmer President and Chief Executive Officer ® angiodynamics
Slide 4: What I heard from customers
What | heard from customers “You had a legacy of innovation” “You have high quality products” “We want you to get new products to market faster” “Your people are terrific” “We trust you” “We want you to deliver on your promises” ® angiodynamics
Slide 5: What I heard from employees
What | heard from employees “We love serving our “We are not sure of our customers” vision” “We want things to move “We want Angio to deliver faster” ‘on promises” . “We want Angio to be a eat ei accountable for its performance” 5 ® angiodynamics
Slide 6: What I heard from the investment community
What | heard from the investment community “You are respected by the thee Ft physician community” ‘Angio has lacked credibility” “You have high quality “We want you to deliver on products” your promises” “You can’t seem to grow in “You couldn't get out of your your markets” way” “Angio is a good com
Slide 7: So, what are we doing about this?
So, what are we doing about this? Strategy Define, challenge, execute, refine Structure Mission-aligned, enables the organization, lean, purposeful People Competent and willing, desire to win, unwavering integrity and trust We have been making many changes to improve our performance ® angiodynamics
Slide 8: What we have done over the past 12-months
What we have done over the past 12-months Introducednew product —Develogingstrong pipeline Initiated SKU Rationalization Improve our strategic development stage gate ofinnovative products and Operational planning and external process Consolidation projects competitiveness (MINA Talent Management Glo
Slide 9: FOCUS | EXECUTION | ACCOUNTABILITY
FOCUS | EXECUTION | ACCOUNTABILITY ® angiodynamics
Slide 10: Managing our diverse portfolio
FOCUS | EXECUTION | ACCOUNTABILITY Managing our diverse portfolio INVEST Vascular Access Peripheral Vascular Oncology/Surgery BioFlo Venous Insufficiency NanokKnife Thrombus Management MAINTAIN Vascular Access Peripheral Vascular Oncology/Surgery Base Business Fluid Management Thermal Ablation Perip
Slide 11: Going deeper in the markets with the best opportunities
FOCUS | EXECUTION | ACCOUNTABILITY Going deeper in the markets with the best opportunities INVEST MAINTAIN ior'o ; f A VA Base Business oe Fluid Management . Peripheral Products (Core) AngioVac Nanoknife Thermal Ablation & sh ~ Ni 11% 60% “0% ~50% 3-Year CAGR Expected 2020 Gross Margin Year CAGR Exp
Slide 12: Improving our global business
FOCUS | EXECUTION | ACCOUNTABILITY Improving our global business Simplify the structure & Refine product and market targeting Provide patient access to products through regulatory clearances and clinical data Improve overall mix and margins by driving revenues from targeted global markets and produc
Slide 13: Improving our Research & Development output
FOCUS | EXECUTION | ACCOUNTABILITY Improving our Research & Development output Smart R&D Investments Maintain and increase investment in focused areas Vitality Index improves Enhanced Product Development Process 40% au Implement process to bring products to market predictably from FY2017 to FY2020 I
Slide 14: Optimizing our manufacturing process
FOCUS | EXECUTION | ACCOUNTABILITY Optimizing our manufacturing process Simplify our footprint Consolidate manufacturing; Reduce overhead costs Make operational excellence part of our DNA Consistently and continually reduce COGS Strengthen our supply chain Continue SKU reduction initiative that elim
Slide 15: Increase our value to each of our stakeholders
FOCUS | EXECUTION | ACCOUNTABILITY 2 Partner with Increase our value to each of our stakeholders providers and caregivers to deliver superior care to patients 8 ® angiodynamics
Slide 16: Delivering consistent returns to stakeholders
FOCUS | EXECUTION | ACCOUNTABILITY Delivering consistent returns to stakeholders FY'16 FY17 Results Estimate y't8—FY'20 Revenue* $353.9m H $352-355m ~49%6CAGR ‘Adjusted Earnings Per Sharet $0.60 $0.68-$0.70 10-12% CAGR ‘Adjusted EBITDAt 14% i 15-17% “20% by 2020 Free Cash Flow $42.9m 1 $35m+ $60m+ b
Slide 17: AngioDynamics is changing.
AngioDynamics is changing. Deliberately and intentionally. We have made incredible strides. We are not done. ” ® angiodynamics
Slide 18: Vascular Access Growth Plan
Vascular Access Growth Plan Chad Campbell Senior Vice President and General Manager ® angiodynamics
Slide 19: Vascular Access Market Overview
Vascular Access Market Overview Acute Patient Chronic Patient Midlines PICCs. Ports. Dialysis Developing Expanding Slowing Expanding ® angiodynamics
Slide 20: A Balanced Approach to Serving the Vascular Access Patient
A Balanced Approach to Serving the Vascular Access Patient Acute Patient Chronic Patient Midlines PICCs. Ports. Dialysis Recent ANGO Focus New Balanced Approach A t Drive demand for value-based products that improve clinical outcomes for patients and reduce costs for providers across the vascular ac
Slide 21: An Unmet Patient and Customer Need: Thrombus
An Unmet Patient and Customer Need: Thrombus + PlCC-reiated uoper extremity DVT occurs in an average of 20-7.8% of patients THE PROBLEM > Thrombosis * 22%2%estenswiha dass cateter dee ion? 25% average occusion rate most frequent complication of vascular access devicest + 7hmenr patients inthe US by
Slide 22: Risk Reduction: Single Center Prospective Hospital Data
Risk Reduction: Single Center Prospective Hospital Data Complication Rates Total Cathflo Expense 10.2% $46,551.00 lr Standard Polyurethane PICC/ \ a) Bh 14% $11,865.94 \ / mo Anti-Thrombogenic PICC occuusions UEDVIs istandard Polyurethane _ggAnt-Thrombogenic BioFlo is a safe, advanced technology vas
Slide 23: Global Growth Enablers
Global Growth Enablers 95090 Strategic Portfolio Commercial Clinical and Economic Operational Enhancements Discipline Research Efficiencies Abalanced approach to data collection, R&D, operational efficiency and commercial discipline ® angiodynamics
Slide 24: Focused Portfolio Management: Balanced Not Equal
Focused Portfolio Management: Balanced # Equal Base Business 0% | nainain | 3-Year Revenue CAGR Shifting the Portfolio Mix to BioFlo . 46% > 54% h 4 . fi fi d &BioFlo 10% FY2017Mix vs. FY2020Mix = Bi] 3.Year Revenue CAGR FOCUS | EXECUTION | ACCOUNTABILITY * ® angiodynamics
Slide 25: Peripheral Vascular Growth Plan
Peripheral Vascular Growth Plan Bob Simpson Senior Vice President and General Manager ® angiodynamics
Slide 26: Focused Portfolio Management: Driving Growth & Operational Leverage
Focused Portfolio Management: Driving Growth & Operational Leverage Fluid Peripheral Products Venous Thrombus Insufficiency Management Management (Core) EXPANDING ACCELERATING MATURE STABLE 8) nam j C Angiographic Catheters ge Prone inne > & Accessories H Uni-Fuse am El ASCLERA vets ATER ye | amen I
Slide 27: Venous Insufficiency: Capitalize on Market Expansion and Emerging Technology
Venous Insufficiency: Capitalize on Market Expansion and Emerging Technology C1:Spider C2: Varicose (3:Edema Cé:Skin —CS:Healed 6: Active >» gVeins Veins . Changes Venous Ulcers Venous Ulcer @ASCLERA (polidocano)) Injection a Enhance portfolio and \crease procedural capture ® angiodynamics
Slide 28: Thrombus Management: Build Comprehensive Portfolio for Share Gains
Thrombus Management: Build Comprehensive Portfolio for Share Gains US Thrombectomy & CDT Market* G20 3 200 cor 3150 Mechanica Thrombectomy E100 Manual Aspiration 290 0 20 iso 20180 Position current portfolio for procedure share growth in a growing market Case Complexit Simple Complex Enhance portfol
Slide 29: Fluid Management & Peripheral Products: Enhance Profitability
Fluid Management & Peripheral Products: Enhance Profitability through Operational Discipline Fluid Management Peripheral Products (Core) * Focused, consultative selling with * Secure market leading position in dedicated team Angiographic catheters * Consolidate custom sub-assembly * Launch increment
Slide 30: Focused Portfolio Management: Driving Operational Leverage & Growth
Focused Portfolio Management: Driving Operational Leverage & Growth Peripheral Products 0% sae tea Fluid Management 34ear Revenue CAGR ~45% & a iE & 2 FY2018 Margin Maintain Products Venous Insufficiency 6% ~E00 Thrombus Management 2'<rteveuecacr 65% Invest FY2018 Margin Invest Products FOCUS | EXEC
Slide 31: Oncology/Surgery Growth Plan
Oncology/Surgery Growth Plan Rick Stark Senior Vice President and General Manager ® angiodynamics
Slide 32: Market opportunities in Surgical Ablation
Market opportunities in Surgical Ablation Thermal Ablation Non-Thermal Ablation EXPANDING ACCELERATING s Radiofrequency R Microwave Ablation Ablation Ablation continues to take a larger portion of the oncology surgery market, with non-thermal and microwave ablation growing at significant rates 2 ® a
Slide 33: Oncology/Surgery Growth Driven by NanoKnife
Oncology/Surgery Growth Driven by NanoKnife 8309 Clinical Indication and Global Innovative Evidence Reimbursement Expansion Technologies Global expansion, clinical evidence, indication and reimbursement, and innovation for NanoKnife technology will allow AngioDynamics to expand the ablation market ®
Slide 34: Differentiating NanoKnife in the Ablation Marketplace
Differentiating NanoKnife in the Ablation Marketplace Aunique alternative to thermal ablation that Market strategy to address patient needs does not rely on heat to ablate soft tissue driven by clinical research High votage electrical pulses produce an lect field which induces electroporation of cel
Slide 35: Clinical Data Drives Reimbursement and Indication Strategies
Clinical Data Drives Reimbursement and Indication Strategies Liver Pancreas Prostate : s % 4 = Ve] AHPBA braced Endourological Society 70+ publications 40+ publications from 7 countries 25+ publications With more than 300 publications to date, additional clinical research is being collected across d
Slide 36: Global Growth Through Reimbursement
Global Growth Through Reimbursement = Sk Il = _—SO*—C iN CMS Meetings to initiate NICE Assessment for pret eS GED 4 with Evidence Coverage Decision Pancreatic Cancer Development Pathway (CMS National Institute for us Health and Care Excellence HAUTE AUTORITE DE SANTE Initiating Research Program to C
Slide 37: Expanding NanoKnife Indications
Expanding NanoKnife Indications a ® angiodynamics
Slide 38: Global Expansion
Global Expansion Consolidate manufacturing and distribution for legacy thermal ablation products Solero CE Mark Certification and FDA 510K Clearance —" International registrations for NanoKnife and Solero Drive operational improvements in legacy ablation devices and maintain market leadership positi
Slide 39: Technology Innovation Drives Market Expansion
Technology Innovation Drives Market Expansion New technologies based on the Nanoknife platform can improve acceptance among physicians and enable expanded market opportunities ® angiodynamics
Slide 40: Focused Portfolio Management: Fueling Significant Growth
Focused Portfolio Management: Fueling Significant Growth Improving Profitability Thermal Ablation 0% 3-Year Revenue CAGR ~65% FY2018 Margin Leverage Products i Nancknife 32% ~715% | raisin | Invest 3-Year Revenue CAGR FY2018 Margin Growth Products FOCUS | EXECUTION | ACCOUNTABILITY o ® angiodynamics
Slide 41: Financial Summary
Financial Summary Michael Greiner Executive Vice President and Chief Financial Officer ® angiodynamics
Slide 42: Delivering Financial Returns to Shareholders
Delivering Financial Returns to Shareholders 3 Increase Deploy a Strategic Profitability Balance Sheet a ® angiodynamics
Slide 43: Revenue Profile
Revenue Profile Investment Portfolio Growth Product Mix Shift Growth 37% 63% 3S 4 6% S 4-070 2% —— 2.4% EE 10-13% 36% ‘(EE 11-15% 3 459% 55% an 0 —_ 5™11% Invest Maintain FY2020 FY2019 FY2018 e > 3S ® angiodynamics
Slide 44: Margin Expansion through Improved Productivity and Mix
Margin Expansion through Improved Productivity and Mix 200 150 100 Gross Margins FY2018 » FY2019 FY2020 51% = S2%+ —S3%6+ = 55% Fo? Frags. «F219.» FY2020 55%t Gross Margin in 2020 Margin Drivers Productivity +300-415bps Price (150}-(200)bps Product Mix +200-235bps +350-450bps ® angiodynamics
Slide 45: Attractive Tax Attributes
Attractive Tax Attributes sin Federal Net Operating Losses Frog Fr2019 Fv2020 USGAAP Taxes $5-6m $6:7m — $7-8m ad Effective TaxRate 60% 30% == 15% $150 CashTaxes $0.5-Im $0.5-1m $1-2m $140 ‘Effective Tax Rate 6% 5% 5% $130 NPV* Cash Tax Benefit Attributed to NOLs (@35% Corporate Tax Rate: $33.4m or
Slide 46: Adjusted EPS J-Curve Profile
Adjusted EPS J-Curve Profile $1.00 $0.80 $0.60 ‘Adj. EPS Reconciled from ~12% FY2007 to FY2018 3-Year CAGR FY 2017 $0.68-80.70 Gross Profit Improvements 0.13 Med Device Tax (0.04) ' Stock-Based Compensation (0.03) Inflation (0.03) FY 2018P $0.64-$0.68 FY2017 Fy2018 FY2019 F¥2020 Adjusted EPS $0680.7
Slide 47: Strong Operating Results Fuel Cash Growth
Strong Operating Results Fuel Cash Growth $8 Adjusted EBITDAS* $70 Free Cash Flow 12% / 1% 3-Year CAGR 3-Year CAGR ‘$60m+ Fy2018 = FY2019—F¥2020 Fy2018 ~=—-FY2019——FY2020 $5m $75m sim 20% Adjusted EBITDAS Margin in 2020 ® angiodynamics
Slide 48: Moving from Net Debt to Net Cash
Moving from Net Debt to Net Cash $200 Term Loan A asso Amortization Schedule FY2017 $25m FY2018 $5.0m 100 FY2019 $5.0m FY2020 $7.5m ss ae 3 590 a Fy2017 | 2018 = FY2019F¥2020 Net (debt) cash (957m) ($32-$22m) $2-$22m —_$60-$85m Solid capital structure will further strengthen over 3-year guidance hor
Slide 49: Significant Liquidity
Significant Liquidity go, ($190m_— | Sat0gz20m ———$2a-260m ———S80-315m_ T 1 t v 1 1 1 ' ' 1 1 1 nl 1 ' nl 1 ' 1 1 1 1 i 1 1 1 1 1 T Fy2017 , Fy2018 FY2019 FY2020 Cash and Investments —_m Revolver Availability » ® angiodynamics
Slide 50: From FY2017 to FY2020: AngioDynamics' Investment Thesis
From FY2017 to FY2020: AngioDynamics’ Investment Thesis FY2017 Fy2020 3-Year CAGR $352m+ $400m+ Total Cash = SA0m+ $140m+ FOCUS | EXECUTION | ACCOUNTABILITY % ® angiodynamics
Slide 51: The Path to Value Creation
The Path to Value Creation Jim Clemmer President and Chief Executive Officer ® angiodynamics
Slide 52: We listened...
We listened... “Angio has a legacy of innovative, high quality products” “Angio is a good company, but you need to be great” “We want Angio to move faster” “We are not sure of Angio’s vision” “We want Angio to be accountable for its performance” “We want Angio to deliver on your promises” ® angiodyn
Slide 53: We responded...
We responded... Strategy * Active portfolio management with priority investment opportunities Structure * Simplified corporate structure * Culture of comprehensive operational excellence driving execution improvements People * Strong, capable and accountable leadership * Employee culture of high-per
Slide 54: We are focusing where we can win...
We are focusing where we can win... Biorlo / AngioVac ; ee a “11% “60% 3-Year CAGR Geter se ® angiodynamics
Slide 55: We are improving our executional ability...
We are improving our executional ability... ® angiodynamics
Slide 56: We are accountable for our performance...
We are accountable for our performance... S$400+ ~55%t S60m+ $0.92-$0.98 $60m+ Drive revenue growth, improve operationally and generate cash to enable strategic investments ® angiodynamics
Slide 57: We understand our risks, and our opportunities
We understand our risks, and our opportunities Internal Risks Speed to commercalization Commercial Discipline Internal Opportunities Talent Development R&D Pipeline International Growth COGS Improvernents Internal Execution Financial Strength External Risks Regulatory and Healthcare Policy Marketpla
Slide 58: We have a new vision for AngioDynamics
We have a new vision for AngioDynamics 2 Partner with providers and caregivers to deliver superior care to patients 3 Increase our value to each of our stakeholders ® angiodynamics
Slide 59: AngioDynamics is changing.
AngioDynamics is changing. Deliberately and intentionally. We have made incredible strides. We are not done. 8 ® angiodynamics
Slide 60: Growth through Focus Execution Accountability
Growth through Focus Execution | Accountablity ® angiodynamics