AngioDynamics, Inc.
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Item 1. Business.
OVERVIEW
AngioDynamics is a dynamic, diversified medical technology company committed to expanding treatment options and improving patient outcomes and quality of life by designing, manufacturing and selling products and technologies which aid clinicians in the treatment of patients with cardiovascular disease and cancer diagnoses. Our execution strategy is built on innovative R&D, clinical and regulatory pathway expansion and customer centric sales performance.
HISTORY
AngioDynamics was founded in Queensbury, N.Y., U.S., in 1988 and began manufacturing and shipping product in the early 1990s. The Company is headquartered in Latham, N.Y., with manufacturing primarily out of the Queensbury facility. Initially dedicated to the research and development of products used in interventional radiology, the Company soon became well established as a producer of diagnostic catheters for non-coronary angiography and thrombolytic delivery systems.
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The Company grew over the following years as a result of acquisitions of companies including RITA Medical Systems in January 2007, Oncobionic in May 2008, the assets of Diomed in June 2008, Vortex Medical, Inc. in October 2012, the assets of Microsulis Medical Limited in January 2013, and Clinical Devices in August 2013. These acquisitions added product lines including ablation and NanoKnife systems, vascular access products, angiographic products and accessories, dialysis products, drainage products, thrombolytic products, embolization products and venous products. In May 2012, the Company acquired Navilyst Medical's Fluid Management business, which the Company sold in May 2019 to Medline Industries, Inc. pursuant to an asset purchase agreement.
In August 2018, the Company acquired the BioSentry product line from Surgical Specialties, LLC, which the Company sold in June 2023 to Merit Medical Systems, Inc. pursuant to an asset purchase agreement. In September 2018, the Company acquired RadiaDyne, which included endorectal and vaginal balloons. On October 2, 2019, the Company acquired Eximo Medical, Ltd., a pre-commercial stage medical device company and its proprietary 355nm laser atherectomy technology (now called Auryon), which treats Peripheral Artery Disease. On December 17, 2019, the Company acquired the C3 Wave tip location asset from Medical Components Inc. On July 27, 2021, AngioDynamics acquired the Camaro Support Catheter asset from QX Medical, LLC.
On June 8, 2023, the Company completed the sale of the dialysis and BioSentry businesses to Merit Medical Systems, Inc. On February 15, 2024, the Company completed the sale of its PICC and Midline businesses, which included the C3 Wave tip location asset, to Spectrum Vascular. As of February 29, 2024, the Company discontinued the RadioFrequency Ablation and Syntrax product lines.
AngioDynamics is publicly traded on the NASDAQ stock exchange under the symbol ANGO.
PRODUCTS
Our product offerings fall within two segments, Med Tech and Med Device. All products discussed below have been cleared for sale in the United States by the Food and Drug Administration. International regulatory clearances vary by product and jurisdiction.
Med Tech
Auryon
The Auryon Atherectomy System is one of our latest advancements in peripheral arterial disease. The Auryon system is designed to deliver an optimized wavelength and short pulse width to remove lesions while preserving the vessel wall endothelium. Additionally, the Auryon system features integrated aspiration which enhances the safety of the procedure. Regardless of lesion type or location - whether above or below the knee - the Auryon system provides safety, efficacy and versatility, supporting femoral, pedal or radial access. The Auryon system is indicated for use in the treatment, including atherectomy, of infrainguinal stenoses and occlusions, including in-stent restenosis (ISR), and to aspirate thrombus adjacent to stenoses in native and stented infrainguinal arteries.
Thrombectomy
Our Thrombus Management portfolio includes the AlphaVac Mechanical Thrombectomy System, AngioVac venous drainage cannula and circuit, as well as catheter directed thrombolytic devices, including the Uni-Fuse system and the Uni-Fuse+ system. AngioDynamics offers a range of options when treating thrombus and removing fresh, soft thrombi or emboli.
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AngioVac
Our AngioVac venous drainage system includes a Venous Drainage Cannula and Extracorporeal Circuit. The cannula is indicated for use as a venous drainage cannula and for removal of fresh, soft thrombi or emboli during extracorporeal bypass. The AngioVac circuit is indicated for use in procedures requiring extracorporeal circulatory support for periods of up to six hours. AngioVac devices are for use with other manufacturers’ off-the-shelf pump, filter and reinfusion cannula, to facilitate venous drainage as part of an extracorporeal bypass procedure.
The AngioVac venous drainage cannula is a 22 French flat coil-reinforced cannula designed with a proprietary self-expanding nitinol reinforced funnel shaped distal tip. The funnel shaped tip enhances venous drainage flow when the distal tip is exposed by retracting the sheath, helps prevent clogging of the cannula with commonly encountered undesirable intravascular material, and facilitates embolic removal of such extraneous material.
AlphaVac
The AlphaVac System is an emergent mechanical aspiration device that eliminates the need for perfusionist support. AlphaVac is offered in both a 22 French flat coil-reinforced cannula and an 18 French braided reinforced cannula each designed with a proprietary self-expanding nitinol reinforced funnel shaped distal tip. AlphaVac is indicated for the non-surgical removal of thrombi or emboli from vasculature as well as aspiration of contrast media and other fluids from the vasculature. The cannula is intended for use in the venous system. The handle is indicated as a vacuum source for the AlphaVac MMA system. The AlphaVac F18 system is indicated for the treatment of pulmonary embolism and allows for the utilization in the non-surgical removal of thrombi or emboli from the venous vasculature, reducing thrombus burden and improving right ventricular function in patients with PE.
Thrombolytic Catheters
Thrombolytic catheters are used to deliver thrombolytic agents, which are drugs that dissolve blood clots in hemodialysis access grafts, arteries, veins and surgical bypass grafts. AngioDynamics’ Uni-Fuse infusion catheter features pressure response outlets, a proprietary slit technology that provides a consistent, even distribution of fluid volume along the entire length of the infusion pattern, designed to provide an advantage over standard side-hole catheters.
We also offer the Pulse-Spray infusion system for high pressure, pulsed delivery of lytic agents designed to shorten treatment time, and the SpeedLyser infusion system built for dialysis grafts and fistulas.
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NanoKnife
The NanoKnife IRE Ablation System is an alternative to traditional thermal ablation that received 510(k) clearance from the Food and Drug Administration for the surgical ablation of soft tissue. The system utilizes low energy direct current electrical pulses to permanently open pores in target cell membranes. These permanent pores or nano-scale defects in the cell membranes result in cell death. The treated tissue is then removed by the body’s natural processes in a matter of weeks, mimicking natural cell death. Unlike other ablation technologies, the NanoKnife System does not achieve tissue ablation using thermal energy.
The NanoKnife System consists of two major components: a Low Energy Direct Current, or LEDC Generator and needle-like electrode probes. Up to six (6) electrode probes can be placed into or around the targeted soft tissue. Once the probes are in place, the user enters the appropriate parameters for voltage, number of pulses, interval between pulses, and the pulse length into the generator user interface. The generator then delivers a series of short electric pulses between each electrode probe. Full paralytic anesthesiology is required for safe IRE delivery.
In December 2024, the NanoKnife System received expanded FDA 510(k) clearance for the ablation of prostate tissue which broadens treatment options for men and reinforces the system’s strong safety and efficacy profile.
Med Device
Peripheral Products (Interventional Devices)
We offer a comprehensive portfolio of products for use during minimally invasive procedures. Product categories include an extensive line of angiographic catheters, guidewires, drainage catheters and micropuncture kits.
Angiographic Catheters & Guidewires
Our extensive line of various angiographic catheter configurations are designed to allow physicians to navigate and reach targeted anatomical locations within a patient’s vasculature that are in need of angiographic diagnosis. Typically run over a diagnostic guidewire, our angiographic catheters allow physicians to deliver contrast media to the desired location to determine the diagnosis and subsequent therapeutic modalities, as needed for the patient.
AngioDynamics offers three different angiographic catheter lines to meet physicians’ procedural needs. All of our catheters feature our soft, atraumatic, super-radiopaque tip that is uniquely welded to our co-extruded nylon shaft, which provides excellent visibility under fluoroscopy and re-enforced tip stability.
•Soft-Vu Angiographic Catheters highlight the soft, atraumatic super-radiopaque and proprietary tip-to-shaft weld in a full offering of different tip shapes, lengths and French sized flush and selective catheters. Flush catheters are used in procedures where a large volume of contrast is required to deliver a concentrated bolus of contrast quickly for visualization or larger anatomical locations, such as the aorta or for run-offs into lower extremities. Selective catheters are typically used to gain access to more specific vasculature within the body to deliver smaller amounts of contrast.
•Mariner Hydrophilic Catheters also feature a hydrophilic coating on the distal 20cm of the catheter that reduces friction during catheter advancement in the vasculature and allows for smooth navigation, as well as, optimum handling and control by the physician.
•Accu-Vu Sizing Catheters are our line of flush catheters that also feature highly visible radiopaque marker bands, which are heat embedded, along the catheter shaft, providing a smooth transition across the catheter shaft to ensure the marker bands will not separate from the shaft. These radiopaque marker bands come in different patterns along the shaft and allow physicians, under fluoroscopy, to take measurements in different anatomical locations for the placement of stents, IVC filters or other devices. The tight tolerances and consistent placement across the entire sizing pattern, within +/-1mm of accuracy, provide a highly accurate measurement to the physician.
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AngioDynamics offers a line of diagnostic and interventional guidewires which are designed to aid in delivering diagnostic and/or therapeutic devices to the desired location.
•The ADx Peripheral Vascular Guidewire line is AngioDynamics diagnostic line of guidewires that is available in a multitude of fixed core wire configurations, including J-Tip and Bentson, in various lengths and outer diameters (OD). By utilizing a proprietary pre-coat process for the Polytetrafluoroethylene (PTFE) and upholding tight specifications, our ADx Guidewires offer high quality and performance for physicians.
•The NiT-Vu High Performance Micro Guidewires are our highly kink resistant nitinol shaft interventional wires that feature a highly visible radiopaque tungsten tip and lubricious coating. The NiT-Vu wires are designed to reduce friction during wire advancement and also provides torque control, flexibility and kink resistance.
Drainage Products
To aid physicians in percutaneous drainage procedures, AngioDynamics offers the Total Abscession Drainage Catheters. The Total Abscession Drainage Catheter is available in Multipurpose/General and Biliary configurations, and also offers a Nephrostomy option. The portfolio offers options with a radiopaque marker band at the distal tip to aid in placement.
•The Total Abscession Drainage Catheter line offers a soft, kink resistant shaft that features the lubricious Blue Silk Finish for easier insertion and pushability, while providing the optimal patient comfort. The unique Vault Locking Mechanism securely fixes the pigtail and prevents tampering or accidental removal.
Micropuncture Kits
AngioDynamics offers physicians two micropuncture kit lines that are designed to start each procedure with ease and efficiency: Mini Stick MAX Coaxial Microintroducer Kits and Micro-Introducer Kits. Each kit features a coaxial design with a 4F or 5F sheath introducer and stiff or standard dilator, along with a 21G needle and various 0.018” access wire configurations.
•Mini Stick MAX Coaxial Introducer kits contain a unique containment clip that keeps all the unique components of the kit together and organized. The kit options include our AngioDynamics proprietary coaxial introducer with smooth transition at the tip, translucent 21G needle with bevel indicator and 0.018” access wire available in three different wire material configurations.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read together with the consolidated financial statements and the notes thereto and other information included elsewhere in this quarterly report on Form 10-Q. The following discussion should be read in conjunction with the Company's 2025 Annual Report on Form 10-K, and the consolidated financial statements and notes thereto included elsewhere in the Form 10-Q.
Disclosure Regarding Forward-Looking Statements
This quarterly report on Form 10-Q, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics' expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include the words such as "expects," "reaffirms," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "projects," "optimistic," or variations of such words and similar expressions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ materially from AngioDynamics' expectations, expressed or implied. Factors that may affect the actual results achieved by AngioDynamics include, without limitation, the ability of AngioDynamics to develop its existing and new products, technological advances and patents attained by competitors, infringement of AngioDynamics' technology or assertions that AngioDynamics' technology infringes the technology of third parties, the ability of AngioDynamics to effectively compete against competitors that have substantially greater resources, future actions by the FDA or other regulatory agencies, domestic and foreign health care reforms and government regulations, results of pending or future clinical trials, overall economic conditions (including inflation, tariffs, labor shortages and supply chain challenges including the cost and availability of raw materials), the results of on-going litigation, challenges with respect to third-party distributors or joint venture partners or collaborators, the results of sales efforts, the effects of product recalls and product liability claims, changes in key personnel, the ability of AngioDynamics to execute on strategic initiatives, the effects of economic, credit and capital market conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, the ability of AngioDynamics to obtain regulatory clearances or approval of its products, or to integrate acquired businesses. Other risks and uncertainties include, but are not limited to, the factors described from time to time in our reports filed with the Securities and Exchange Commission (the "SEC").
Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this quarterly report on Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, investors are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date stated, or if no date is stated, as of the date of this report. AngioDynamics disclaims any obligation to update the forward-looking statements.
Disclosure Regarding Trademarks
This report includes trademarks, tradenames and service marks that are our property or the property of other third parties. Solely for convenience, such trademarks and tradenames sometimes appear without any “™” or “®” symbol. However, failure to include such symbols is not intended to suggest, in any way, that we will not assert our rights or the rights of any applicable licensor, to these trademarks and tradenames. For a complete listing of all our trademarks, tradenames and service marks please visit www.angiodynamics.com/IP. Information on our website or connected to our website is not incorporated by reference into this Quarterly Report on Form 10-Q.
Executive Overview
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. Our devices are generally used in minimally invasive, image-guided procedures. Many of our products are intended to be used once and then discarded, or they may be temporarily implanted for short- or long-term use.
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Our business operations cross a variety of markets. Our financial performance is impacted by changing market dynamics, which have included an emergence of value-based purchasing by healthcare providers, consolidation of healthcare providers, the increased role of the consumer in health care decision-making and an aging population, among others. In addition, our growth is impacted by changes within our sector, such as the merging of competitors to gain scale and influence; changes in the regulatory environment for medical devices; and fluctuations in the global economy.
Our sales and profitability growth also depends, in part, on the introduction of new and innovative products, together with ongoing enhancements to our existing products. Expansions of our product offerings are created through internal and external product development, technology licensing and strategic alliances. We recognize the importance of, and intend to continue to make investments in research and development activities and selective business development opportunities to provide growth opportunities.
We sell our products in the United States primarily through a direct sales force, and outside the U.S. 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.
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.
In evaluating the operating performance of our business, management focuses on company-wide and segment revenue and gross margin and company-wide operating income, earnings per share and cash flow from operations. A summary of these key financial metrics for the three and nine months ended February 28, 2026 compared to the three and nine months ended February 28, 2025 are as follows:
Three months ended February 28, 2026:
•Revenue increased by 8.9% to $78.4 million
•Med Tech and Med Device growth of 19.0% and 1.2%, respectively
•Gross margin decreased 110 bps to 52.9%
•Med Tech gross margin remained consistent at 62.5% and Med Device gross margin decreased 320 bps to 44.2%
•Net loss increased by $3.7 million to a loss of $8.1 million
•Loss per share increased by $0.08 to $0.19
Nine months ended February 28, 2026:
•Revenue increased by 10.0% to $233.6 million
•Med Tech and Med Device growth of 19.1% and 3.2%, respectively
•Gross margin increased 50 bps to 54.9%
•Med Tech gross margin increased 10 bps to 63.3% and Med Device gross margin decreased 20 bps to 47.6%
•Net loss decreased by $2.6 million to a loss of $25.3 million
•Loss per share decreased by $0.07 to $0.61
Our Med Tech revenue, comprised of Auryon, the thrombus management platform and NanoKnife, grew 19.0% in the third quarter of fiscal year 2026 driven by growth across all product lines. Our Med Device revenue grew by 1.2% in the third quarter of fiscal year 2026 driven by growth in the Core and Venous product lines which was partially offset by softness in the Ports.
Results of Operations
For the three months ended February 28, 2026, the Company reported net loss of $8.1 million, or diluted loss per share of $0.19, on net sales of $78.4 million, compared with a net loss of $4.4 million, or diluted loss per share of $0.11, on net sales of $72.0 million during the same quarter of the prior year. For the nine months ended February 28, 2026, the Company reported net loss of $25.3 million, or diluted loss per share of $0.61, on net sales of $233.6 million, compared with a net loss of $27.9 million, or diluted loss per share of $0.68, on net sales of $212.3 million during the same quarter of the prior year.
Net sales - Net sales are derived from the sale of products and related freight charges, less discounts, rebates and returns.
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| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (in thousands) | Feb 28, 2026 | Feb 28, 2025 | $ Change | Feb 28, 2026 | Feb 28, 2025 | $ Change | ||||||||||||||||||||||||||||
| Net Sales | ||||||||||||||||||||||||||||||||||
| Med Tech | $ | 37,282 | $ | 31,341 | $ | 5,941 | $ | 108,196 | $ | 90,863 | $ | 17,333 | ||||||||||||||||||||||
| Med Device | 41,141 | 40,663 | $ | 478 | 125,371 | 121,477 | 3,894 | |||||||||||||||||||||||||||
| Total | $ | 78,423 | $ | 72,004 | $ | 6,419 | $ | 233,567 | $ | 212,340 | $ | 21,227 | ||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (in thousands) | Feb 28, 2026 | Feb 28, 2025 | $ Change | Feb 28, 2026 | Feb 28, 2025 | $ Change | ||||||||||||||||||||||||||||
| Net Sales | ||||||||||||||||||||||||||||||||||
| United States | $ | 67,278 | $ | 61,340 | $ | 5,938 | $ | 201,328 | $ | 183,499 | $ | 17,829 | ||||||||||||||||||||||
| International | 11,145 | 10,664 | $ | 481 | 32,239 | 28,841 | 3,398 | |||||||||||||||||||||||||||
| Total | $ | 78,423 | $ | 72,004 | $ | 6,419 | $ | 233,567 | $ | 212,340 | $ | 21,227 | ||||||||||||||||||||||
For the three months ended February 28, 2026, net sales increased $6.4 million to $78.4 million compared to the same period in the prior year. For the nine months ended February 28, 2026, net sales increased $21.2 million to $233.6 million compared to the same period in the prior year. At February 28, 2026, the Company had a backlog of $0.3 million.
The Med Tech segment net sales increased $5.9 million and $17.3 million for the three and nine months ended February 28, 2026 compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
•Increased Auryon sales of $2.5 million and $7.8 million, respectively;
•Increased sales of the thrombus management platform of $2.1 million and $5.5 million compared to the same period in the prior year, respectively. This was driven by an increase in AlphaVac and AngioVac sales of $1.7 million and $5.5 million compared to the same period in the prior year, respectively and an increase in thrombolytic sales of $0.4 million and $0.1 million compared to the same period in the prior year, respectively; and
•Increased NanoKnife sales of $1.3 million and $4.0 million, respectively, which was driven by increased disposable and capital sales.
The Med Device segment net sales increased $0.5 million and $3.9 million for the three and nine months ended February 28, 2026 compared to the same period in the prior year, respectively. The backlog, which primarily impacted sales of Core products, was $0.3 million. The change for both periods was primarily driven by:
•Increased sales of Core, Venous and Microwave products of $0.5 million, $0.6 million and $0.1 million, respectively, which was partially offset by decreased sales of Ports and other Oncology products of $0.6 million and $0.2 million for the three months ended February 28, 2026.
•Increased sales of Core and Venous products of $2.4 million and $2.2 million, respectively, which was partially offset by decreased sales of Ports and Oncology products of $0.7 million and $0.1 million, respectively, for the nine months ended February 28, 2026.
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Gross Margin
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (in thousands) | Feb 28, 2026 | Feb 28, 2025 | $ Change | Feb 28, 2026 | Feb 28, 2025 | $ Change | ||||||||||||||||||||||||||||
| Med Tech | $ | 23,292 | $ | 19,588 | $ | 3,704 | $ | 68,500 | $ | 57,398 | $ | 11,102 | ||||||||||||||||||||||
| Gross margin % of sales | 62.5 | % | 62.5 | % | 63.3 | % | 63.2 | % | ||||||||||||||||||||||||||
| Med Device | $ | 18,187 | $ | 19,269 | $ | (1,082) | $ | 59,619 | $ | 58,089 | $ | 1,530 | ||||||||||||||||||||||
| Gross margin % of sales | 44.2 | % | 47.4 | % | 47.6 | % | 47.8 | % | ||||||||||||||||||||||||||
| Total | $ | 41,479 | $ | 38,857 | $ | 2,622 | $ | 128,119 | $ | 115,487 | $ | 12,632 | ||||||||||||||||||||||
| Gross margin % of sales | 52.9 | % | 54.0 | % | 54.9 | % | 54.4 | % | ||||||||||||||||||||||||||
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 $2.6 million and $12.6 million for the three and nine months ended February 28, 2026 compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
•Sales volume and price, which positively impacted gross margin by $4.7 million and $14.5 million, respectively. For the nine months ended February 28, 2026, this includes sales to a new distributor which positively impacted gross margin by $1.5 million;
•Benefits from product lines transitioned to third-party manufacturers along with other incentives, which positively impacted gross margin by $1.5 million and $5.1 million, respectively;
•Product mix, which negatively impacted gross margin by $0.3 for the three months ended February 28, 2026 and which positively impacted gross margin by $0.5 million for the nine months ended February 28, 2026;
•Production volume and other incentives, which negatively impacted gross margin by $0.8 million and $1.1 million, respectively;
•Tariffs, which negatively impacted gross margin by $1.4 million and $4.3 million, respectively;
•Inflation and other operations costs, which negatively impacted gross margin by $1.3 million and $1.6 million, respectively; and
•A decrease in incremental depreciation on placement units of $0.2 million for the three months ended February 28, 2026 and an increase in incremental depreciation on placement units of $0.6 million for the nine months ended February 28, 2026.
The Med Tech segment gross margin increased by $3.7 million and $11.1 million for the three and nine months ended February 28, 2026 compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
•Sales volume and price, which positively impacted gross margin by $4.1 million and $12.2 million, respectively. For the nine months ended February 28, 2026, this includes sales to a new distributor which positively impacted gross margin by $1.0 million;
•Benefits from product lines transitioned to third-party manufacturers along with other incentives, which positively impacted gross margin by $1.0 million and $2.2 million, respectively;
•Product mix, which negatively impacted gross margin by $1.2 million and $2.5 million, respectively;
•Inflation and other operations costs, which negatively impacted gross margin by $0.1 million for the three months ended February 28, 2026 and positively impacted gross margin by $0.9 million for the nine months ended February 28, 2026;
•Tariffs, which negatively impacted gross margin by $0.5 million for the nine months ended February 28, 2026; and
•Incremental depreciation on placement units of $1.3 million for the nine months ended February 28, 2026.
The Med Device segment gross margin decreased by $1.1 million and increased $1.5 million for the three and nine months ended February 28, 2026 compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
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•Price and product mix, which positively impacted gross margin by $1.9 million and $4.5 million, respectively. For the nine months ended February 28, 2026, this includes sales to a new distributor which positively impacted gross margin by $0.5 million;
•Benefits from product lines transitioned to third-party manufacturers, which positively impacted gross margin by $0.7 million and $3.4 million, respectively;
•Sales volume, which negatively impacted gross margin by $0.6 for the three months ended February 28, 2026 and which positively impacted gross margin by $0.3 million for the nine months ended February 28, 2026;
•Tariffs, which negatively impacted gross margin by $1.4 million and $3.8 million, respectively;
•Production volume and other incentives, which negatively impacted gross margin by $0.8 million and $1.1 million, respectively;
•Inflation and other operations costs, which negatively impacted gross margin by $1.2 million and $2.5 million, respectively; and
•A decrease in incremental depreciation on placement units of $0.2 million and $0.7 million, respectively.
Operating Expenses and Other Income (Expense)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (in thousands) | Feb 28, 2026 | Feb 28, 2025 | $ Change | Feb 28, 2026 | Feb 28, 2025 | $ Change | ||||||||||||||||||||||||||||
| Research and development | $ | 7,084 | $ | 6,913 | $ | 171 | $ | 21,269 | $ | 19,632 | $ | 1,637 | ||||||||||||||||||||||
| % of sales | 9.0 | % | 9.6 | % | 9.1 | % | 9.2 | % | ||||||||||||||||||||||||||
| Selling and marketing | $ | 27,437 | $ | 25,504 | $ | 1,933 | $ | 82,278 | $ | 76,698 | $ | 5,580 | ||||||||||||||||||||||
| % of sales | 35.0 | % | 35.4 | % | 35.2 | % | 36.1 | % | ||||||||||||||||||||||||||
| General and administrative | $ | 10,719 | $ | 10,490 | $ | 229 | $ | 33,425 | $ | 31,856 | $ | 1,569 | ||||||||||||||||||||||
| % of sales | 13.7 | % | 14.6 | % | 14.3 | % | 15.0 | % | ||||||||||||||||||||||||||
Research and development expense - R&D expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, and manage clinical, regulatory and medical affairs.
R&D expense increased $0.2 million and $1.6 million for the three and nine months ended February 28, 2026 compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
•The timing of certain projects and clinical spend associated with ongoing clinical trials, which increased by $0.3 million and $1.6 million, respectively; and
•Compensation and benefits expenses, which decreased $0.1 million for the three months ended February 28, 2026.
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 increased $1.9 million and $5.6 million for the three and nine months ending February 28, 2026 compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
•Compensation and benefits expense, which increased by $1.0 million and $3.1 million, respectively;
•Consulting, travel and other selling expenses, which increased $0.5 million and $1.4 million, respectively; and
•Trade shows, subscriptions and other marketing expenses, which increased $0.5 million and $1.0 million, respectively.
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.
G&A expense increased $0.2 million and $1.6 million for the three and nine months ended February 28, 2026 compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
•Compensation and benefits expenses, which increased $0.7 million and $3.9 million, respectively;
•Other outside consultant spend, which decreased $0.4 million and $1.8 million, respectively; and
•Depreciation and other corporate expenses, which decreased $0.1 million and $0.6 million, respectively.
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| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (in thousands) | Feb 28, 2026 | Feb 28, 2025 | $ Change | Feb 28, 2026 | Feb 28, 2025 | $ Change | ||||||||||||||||||||||||||||
| Amortization of intangibles | $ | 2,668 | $ | 2,598 | $ | 70 | $ | 7,964 | $ | 7,730 | $ | 234 | ||||||||||||||||||||||
| Change in fair value of contingent consideration | $ | — | $ | 40 | $ | (40) | $ | — | $ | 272 | $ | (272) | ||||||||||||||||||||||
| Acquisition, restructuring and other items, net | $ | 6,522 | $ | 3,286 | $ | 3,236 | $ | 12,915 | $ | 13,465 | $ | (550) | ||||||||||||||||||||||
| Other income, net | $ | 4,879 | $ | 5,565 | $ | (686) | $ | 4,467 | $ | 6,244 | $ | (1,777) | ||||||||||||||||||||||
Amortization of intangibles - Represents the amount of amortization expense that was taken on intangibles assets held by the Company.
•Amortization expense remained consistent for the three and nine months ended February 28, 2026 compared to the same period in the prior year.
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 three and nine months ended February 28, 2026 is related to the Eximo contingent consideration. 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 - 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 $3.2 million and decreased by $0.6 million for the three and nine months ended February 28, 2026, compared to the same period in the prior year. The change for both periods was primarily driven by:
•Legal expense, related to litigation that is outside of the normal course of business, which increased $0.1 million and $1.4 million, respectively;
•Plant closure expense, related to the restructuring of our manufacturing footprint which was announced on January 5, 2024, which increased $2.1 million for the three months ended February 28, 2026 and decreased $1.9 million for the nine months ended February 28, 2026;
•Mergers and acquisition expense, which decreased $0.7 million for the nine months ended February 28, 2026;
•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 $0.1 million for both periods;
•Transition expenses related to the upcoming retirement of our CEO which was announced on January 6, 2026, which increased $0.9 million for both periods; and
•Other expenses, mainly severance associated with organizational changes, increased $0.2 million for the three months ended February 28, 2026 and decreased $0.1 million for the nine months ended February 28, 2026.
Other income, net - Other expenses include interest expense, foreign currency impacts and bank fees.
Other income, net decreased by $0.7 million and $1.8 million, for the three and nine months ended February 28, 2026, compared to the same period in the prior year, respectively. The change for both periods was primarily driven by:
•The Company achieved the manufacturing transfer milestone related to divested products in the third quarter of fiscal year 2026 and recorded the associated revenue of $5.0 million which was paid to the Company in the third quarter of fiscal year 2026;
•The Company achieved the sales milestone related to divested products in the third quarter of fiscal year 2025 and recorded a receivable of $5.5 million which was paid to the Company in the fourth quarter of fiscal year 2025; and
•Interest income, which decreased $0.2 million and $1.2 million, respectively.
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Income Tax Benefit
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| (in thousands) | Feb 28, 2026 | Feb 28, 2025 | Feb 28, 2026 | Feb 28, 2025 | ||||||||||||||||||
| Income tax expense (benefit) | $ | 12 | $ | (2) | $ | 72 | $ | 21 | ||||||||||||||
| Effective tax rate including discrete items | (0.1) | % | — | % | (0.3) | % | (0.1) | % | ||||||||||||||
Our effective tax rate including discrete items for the three months ended February 28, 2026 and February 28, 2025 was (0.1)% and 0.0%, respectively. Our effective tax rate including discrete items for the nine months ended February 28, 2026 and February 28, 2025 was (0.3)% and (0.1)%, respectively. In fiscal year 2026, the Company’s effective tax rate differs from the U.S. statutory rate primarily due to the impact of the valuation allowance, foreign taxes, and other non-deductible permanent items (such as non-deductible meals and entertainment, Section 162(m) excess compensation and non-deductible stock-based compensation).
Liquidity and Capital Resources
We regularly review our liquidity and anticipated capital requirements and we believe that our current cash on hand provides sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months.
Our cash and cash equivalents totaled $37.8 million as of February 28, 2026, compared with $55.9 million as of May 31, 2025. As of February 28, 2026 and May 31, 2025 the Company did not have any outstanding debt.
The table below summarizes our cash flows:
| Nine Months Ended | |||||||||||
| (in thousands) | Feb 28, 2026 | Feb 28, 2025 | |||||||||
| Cash provided by (used in): | |||||||||||
| Operating activities | $ | (14,363) | $ | (28,939) | |||||||
| Investing activities | (4,679) | (7,555) | |||||||||
| Financing activities | 672 | 5,515 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 287 | (317) | |||||||||
| Net change in cash and cash equivalents | $ | (18,083) | $ | (31,296) | |||||||
During the nine months ended February 28, 2026 and 2025, cash flows consisted of the following:
Cash used in operating activities
Nine months ended February 28, 2026 and 2025:
•Net loss of $25.3 million and $27.9 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization and stock based compensation, along with the changes in working capital below, contributed to cash used in operations of $14.4 million and $28.9 million, respectively, for these periods.
•For the period ended February 28, 2026, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $13.5 million, along with increased accounts receivable and prepaid expenses of $2.8 million and $6.4 million, respectively. This was partially offset by decreased inventory of $3.6 million.
•For the period ended February 28, 2025, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $18.5 million, along with increased accounts receivable, inventory and prepaid expenses of $0.4 million, $2.5 million and $9.5 million, respectively.
Cash used in investing activities
Nine months ended February 28, 2026 and 2025:
•$2.2 million and $3.7 million, respectively, of cash was used for fixed asset additions; and
•$2.5 million and $3.9 million, respectively, of cash was used for Auryon placement and evaluation unit additions.
Cash provided by financing activities
Nine months ended February 28, 2026 and 2025:
•$0.3 million and $0.1 million, respectively, of principal payments on the financing arrangements;
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•$6.3 million of proceeds from financing arrangements in the third quarter of fiscal year 2025;
•$1.0 million of proceeds from stock option and ESPP activity for both periods; and
•$1.7 million of cash was used for the repurchase of commons shares in fiscal year 2025.
We believe that our current cash balance, together with cash generated from operations and the 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.
New Accounting Pronouncements
Information regarding new accounting pronouncements is included in Note 16 to our consolidated financial statements in this Quarterly Report on Form 10-Q.
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Next expected filings
- ~2026-07-11 10-K expected by 2026-07-12 (in 2 days)
- ~2026-10-01 10-Q expected by 2026-10-05 (in 84 days)
- ~2027-01-05 10-Q expected by 2027-01-09 (in 180 days)
- ~2027-04-01 10-Q expected by 2027-04-05 (in 266 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-04-23 8-K Other Events
- 2026-04-02 10-Q Quarterly Report
- 2026-04-02 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-03 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-01-06 10-Q Quarterly Report
- 2026-01-06 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-10-02 10-Q Quarterly Report
- 2025-10-02 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-07-18 10-K Annual Report
- 2025-07-15 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-05-28 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-04-02 10-Q Quarterly Report
- 2025-04-02 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-01-08 10-Q Quarterly Report
- 2025-01-08 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits