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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended May 31, 2015
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
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Delaware
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11-3146460
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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14 Plaza Drive Latham, New York
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12110
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01 per share
|
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NASDAQ Global Select Market
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Page
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Part I:
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Item 1.
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||
Item 1A.
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||
Item 1B.
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||
Item 2.
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||
Item 3.
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||
Item 4.
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||
Part II:
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Item 5.
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||
Item 6.
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||
Item 7.
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||
Item 7A.
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||
Item 8.
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||
Item 9.
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||
Item 9A.
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Item 9B.
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||
Part III:
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Item 10.
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||
Item 11.
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||
Item 12.
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||
Item 13.
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||
Item 14.
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Part IV:
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Item 15.
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Item 1.
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Business.
|
•
|
BioFlo
®
PICC
: Our BioFlo line is the only power injectable PICC available that incorporates Endexo Technology into the manufacturing and design of the catheter. Advanced features such as large lumen diameters allow the BioFlo
®
PICC to deliver the power injection flow rates required for contrast-enhanced computed tomography (CT) scans compatible with up to 325 psi CT injections.
|
•
|
Xcela PICC
: The Xcela
®
PICC line is designed to provide a high degree of safety, ease and confidence in patient care. Advanced features such as large lumen diameters allow the Xcela
®
PICC to deliver the power injection flow rates required for contrast-enhanced CTs compatible with up to 325 psi CT injections.
|
•
|
PASV
®
Valve Technology:
The PASV
®
Valve Technology is available in both BioFlo and Xcela lines and is designed to automatically resist backflow and reduce blood reflux that could lead to catheter-related complications.
|
•
|
BioFlo
®
Port
: Our BioFlo line is the only port available that incorporates Endexo Technology into the manufacturing and design of the catheter. Advanced features include multiple profile and catheter options, a large septum area for ease of access and the ability to administer contrast through a CT (Computed Tomography) injection for purposes of imaging.
|
•
|
SmartPort
®
: The Smart Port power-injectable port with Vortex technology offers the ability for a clinician to access a vein for both the delivery of medications or fluids and for administering power-injected contrast to perform a Computed Tomography (CT) scan. The ability to access a port for power-injected contrast studies
|
•
|
Vortex
®
:
Our Vortex port technology line of ports is a clear-flow port technology that, we believe, revolutionized port design. With its rounded chamber, the Vortex port is designed to have no sludge-harboring corners or dead spaces. This product line consists of titanium, plastic and dual-lumen offerings.
|
•
|
PASV
®
Valve Technology:
The PASV
®
Valve Technology is designed to automatically resist backflow and reduce blood reflux that could lead to catheter-related complications.
|
•
|
LifeGuard
®
:
The LifeGuard Safety Infusion Set and The LifeGuard Vision are used to infuse our ports and complement our port and vascular access catheters. The needles’ low profile design is intended to allow clinicians to easily dress the site.
|
•
|
BioFlo
®
: Our BioFlo line is the only dialysis catheter available that incorporates Endexo Technology into the manufacturing and design of the catheter. Advanced features include large inner diameter lumens designed for long term patency, a proprietary guidewire lumen to facilitate catheter exchanges and Curved Tip Technology that allows the catheter to self-center in the SVC (Superior Vena Cava).
|
•
|
DuraMax
®
. The DuraMax catheter is a stepped-tip catheter designed to improve ease of use, dialysis efficiency and overall patient outcomes.
|
Name
|
|
Age
|
|
Position
|
Joseph M. DeVivo
|
|
48
|
|
President and Chief Executive Officer
|
Mark T. Frost
|
|
52
|
|
Executive Vice President, Chief Financial Officer
|
John Soto
|
|
51
|
|
Executive Vice President, Chief Commercial Officer
|
Mark Stephens
|
|
47
|
|
Senior Vice President, Administration
|
Stephen A. Trowbridge
|
|
41
|
|
Senior Vice President and General Counsel
|
Barbara Kucharczyk
|
|
42
|
|
Senior Vice President Global Operations
|
Gary Barrett
|
|
47
|
|
Senior Vice President, Quality & Regulatory Affairs
|
Ben Davis
|
|
51
|
|
Senior Vice President, Business Development
|
Item 1A.
|
Risk Factors.
|
•
|
controls on government-funded reimbursement for healthcare services and price controls on medical products and services providers;
|
•
|
challenges to the pricing of medical procedures or limits or prohibitions on reimbursement for specific devices and therapies through other means; and
|
•
|
the introduction of managed care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person.
|
•
|
recruit engineers;
|
•
|
timely and accurately identify new market trends;
|
•
|
accurately assess customer needs;
|
•
|
minimize the time and costs required to obtain regulatory clearance or approval;
|
•
|
adopt competitive pricing;
|
•
|
timely manufacture and deliver products;
|
•
|
accurately predict and control costs associated with the development, manufacturing and support of our products; and
|
•
|
anticipate and compete effectively with our competitors’ efforts.
|
•
|
financial and other resources to devote to product acquisitions, research and development, marketing and manufacturing;
|
•
|
variety of products;
|
•
|
technical capabilities;
|
•
|
history of developing and introducing new products;
|
•
|
patent portfolios that may present an obstacle to our conduct of business;
|
•
|
name recognition; and
|
•
|
distribution networks and in-house sales forces.
|
•
|
potential disruption of our business while we evaluate opportunities, complete acquisitions and develop and implement new business strategies to take advantage of these opportunities;
|
•
|
inability of our management to maximize our financial and strategic position by incorporating an acquired technology or business into our existing offerings;
|
•
|
our inability to achieve the cost savings and operating synergies anticipated in the acquisition, which would prevent us from achieving the positive earnings gains expected as a result of the acquisition;
|
•
|
diversion of management attention from ongoing business concerns to integration matters;
|
•
|
difficulty of maintaining uniform standards, controls, procedures and policies;
|
•
|
challenges in demonstrating to our customers and to customers of Navilyst that the acquisition will not result in adverse changes in customer service standards or business focus; and
|
•
|
possible cash flow interruption or loss of revenue as a result of change of ownership transitional matters.
|
•
|
difficulty of assimilating the operations and personnel of acquired businesses;
|
•
|
potential loss of key employees of acquired businesses, and the impairment of relationships with employees and customers as a result of changes in management; and
|
•
|
uncertainty as to the long-term success of any acquisitions we may make.
|
•
|
the level of sales of our products and services in our markets;
|
•
|
our ability to introduce new products or services and enhancements in a timely manner;
|
•
|
the demand for and acceptance of our products and services;
|
•
|
the success of our competition and the introduction of alternative products or services;
|
•
|
our ability to command favorable pricing for our products and services;
|
•
|
the growth of the market for our devices and services;
|
•
|
the expansion and rate of success of our direct sales force in the United States and internationally and our independent distributors internationally;
|
•
|
actions relating to ongoing FDA compliance;
|
•
|
the effect of intellectual property disputes;
|
•
|
the size and timing of orders from independent distributors or customers;
|
•
|
the attraction and retention of key personnel, particularly in sales and marketing, regulatory, manufacturing and research and development;
|
•
|
unanticipated delays or an inability to control costs;
|
•
|
general economic conditions as well as those specific to our customers and markets; and
|
•
|
seasonal fluctuations in revenue due to the elective nature of some procedures.
|
•
|
general economic, industry and market conditions;
|
•
|
actions by institutional or other large stockholders;
|
•
|
the depth and liquidity of the market for our common stock;
|
•
|
volume and timing of orders for our products;
|
•
|
developments generally affecting medical device companies;
|
•
|
the announcement of new products or product enhancements by us or our competitors;
|
•
|
changes in earnings estimates or recommendations by securities analysts;
|
•
|
investor perceptions of us and our business, including changes in market valuations of medical device companies;
|
•
|
our results of operations and financial performance.
|
•
|
our board of directors is authorized, without prior stockholder approval, to create and issue “blank check” preferred stock, with rights senior to those of our common stock;
|
•
|
our board of directors is classified so that not all members of our board of directors are elected at one time, which may make it more difficult for a person who acquires control of a majority of our outstanding voting stock to replace our directors;
|
•
|
advance notice requirements for stockholders to nominate individuals to serve on our board of directors or for stockholders to submit proposals that can be acted upon at stockholder meetings;
|
•
|
stockholder action by written consent is prohibited; and
|
•
|
stockholders are not permitted to accumulate their votes for the election of directors.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Location
|
|
Purpose
|
|
Approx.
Sq. Ft.
|
|
Property
Type
|
|
Latham, NY
|
|
Corporate headquarters
|
|
55,000
|
|
|
Leased
|
Glens Falls, NY
|
|
Manufacturing and distribution
|
|
189,000
|
|
|
Owned
|
Queensbury, NY
|
|
Manufacturing and distribution
|
|
129,000
|
|
|
Owned
|
Manchester, GA
|
|
Manufacturing and distribution
|
|
60,000
|
|
|
Leased
|
Marlborough, MA
|
|
Research & Development
|
|
31,000
|
|
|
Leased
|
Denmead, U.K.
|
|
Manufacturing
|
|
7,500
|
|
|
Leased
|
Amsterdam, NL
|
|
Selling, Marketing & Administrative
|
|
10,100
|
|
|
Leased
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
|
Item 6.
|
Selected Financial Data.
|
|
Year ended
|
||||||||||||||||||
|
(Amounts in thousands, except per share information)
|
||||||||||||||||||
|
May 31, 2015
|
|
May 31, 2014
|
|
May 31, 2013
|
|
May 31, 2012
|
|
May 31, 2011
|
||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
356,974
|
|
|
$
|
354,425
|
|
|
$
|
341,916
|
|
|
$
|
221,917
|
|
|
$
|
215,620
|
|
Gross profit
|
176,889
|
|
|
179,668
|
|
|
168,514
|
|
|
125,309
|
|
|
125,573
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
26,931
|
|
|
27,486
|
|
|
26,319
|
|
|
20,511
|
|
|
21,373
|
|
|||||
Sales and marketing
|
80,623
|
|
|
83,200
|
|
|
76,121
|
|
|
64,505
|
|
|
58,123
|
|
|||||
General and administrative
|
29,871
|
|
|
26,639
|
|
|
26,186
|
|
|
19,033
|
|
|
17,760
|
|
|||||
Amortization of intangibles
|
17,912
|
|
|
16,622
|
|
|
16,617
|
|
|
9,309
|
|
|
9,234
|
|
|||||
Change in fair value of contingent consideration
|
(8,196
|
)
|
|
(1,808
|
)
|
|
1,583
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition, restructuring and other items, net (a)
|
26,600
|
|
|
10,760
|
|
|
13,800
|
|
|
15,859
|
|
|
7,182
|
|
|||||
Medical device excise tax
|
4,142
|
|
|
3,829
|
|
|
1,600
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
177,883
|
|
|
166,728
|
|
|
162,226
|
|
|
129,217
|
|
|
113,672
|
|
|||||
Operating income (loss)
|
(994
|
)
|
|
12,940
|
|
|
6,288
|
|
|
(3,908
|
)
|
|
11,901
|
|
|||||
Total other (expenses) income, net
|
(7,005
|
)
|
|
(7,200
|
)
|
|
(7,875
|
)
|
|
(1,514
|
)
|
|
(1,265
|
)
|
|||||
Net income (loss)
|
$
|
(3,268
|
)
|
|
$
|
2,666
|
|
|
$
|
(1,211
|
)
|
|
$
|
(5,183
|
)
|
|
$
|
8,077
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.09
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
0.32
|
|
Diluted
|
$
|
(0.09
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
0.32
|
|
(a)
|
Acquisition, restructuring and other items, net consists of fixed and long-term asset impairments, intangible impairments, cost associated with litigation, recalls, the operational excellence program and other miscellaneous items.
|
|
As of
|
||||||||||||||
|
(Amounts in thousands)
|
||||||||||||||
|
May 31,
2015
|
|
May 31,
2014
|
|
May 31,
2013
|
|
May 31,
2012
|
|
May 31,
2011
|
||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||
Cash, cash equivalents and marketable securities
|
$
|
20,080
|
|
|
17,914
|
|
|
23,955
|
|
|
40,309
|
|
|
131,542
|
|
Working capital
|
94,656
|
|
|
84,969
|
|
|
77,839
|
|
|
103,991
|
|
|
168,775
|
|
|
Total assets
|
773,623
|
|
|
798,891
|
|
|
790,734
|
|
|
719,988
|
|
|
437,312
|
|
|
Total debt
|
137,660
|
|
|
142,660
|
|
|
142,500
|
|
|
150,000
|
|
|
6,550
|
|
|
Contingent consideration
|
47,384
|
|
|
67,331
|
|
|
75,049
|
|
|
—
|
|
|
—
|
|
|
Total long-term liabilities
|
167,444
|
|
|
195,303
|
|
|
201,317
|
|
|
142,827
|
|
|
6,275
|
|
|
Total stockholders’ equity
|
545,022
|
|
|
536,835
|
|
|
526,102
|
|
|
523,391
|
|
|
405,637
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Conditions and Results of Operations.
|
|
For the years ended May 31,
|
||||||||||||
|
2015
|
|
2014
|
|
% Growth
|
|
Currency Impact (Pos) Neg
|
|
Constant Currency Growth
|
||||
Net Sales by Product Category
|
|
|
|
|
|
|
|
|
|
||||
Peripheral Vascular
|
$
|
192,833
|
|
|
$
|
192,626
|
|
|
0%
|
|
|
|
|
Vascular Access
|
107,874
|
|
|
106,394
|
|
|
1%
|
|
|
|
|
||
Oncology/Surgery
|
52,090
|
|
|
49,360
|
|
|
6%
|
|
|
|
|
||
Total Excluding Supply Agreement
|
352,797
|
|
|
348,380
|
|
|
1%
|
|
1%
|
|
2%
|
||
Supply Agreement
|
4,177
|
|
|
6,045
|
|
|
-31%
|
|
0%
|
|
-31%
|
||
Total
|
$
|
356,974
|
|
|
$
|
354,425
|
|
|
1%
|
|
0%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
||||
Net Sales by Geography
|
|
|
|
|
|
|
|
|
|
||||
United States
|
$
|
280,851
|
|
|
$
|
280,161
|
|
|
0%
|
|
0%
|
|
0%
|
International
|
71,946
|
|
|
68,219
|
|
|
5%
|
|
4%
|
|
9%
|
||
Supply Agreement
|
4,177
|
|
|
6,045
|
|
|
-31%
|
|
0%
|
|
-31%
|
||
Total
|
$
|
356,974
|
|
|
$
|
354,425
|
|
|
1%
|
|
0%
|
|
1%
|
|
|
For the year ended May 31,
|
|||||||||
|
|
2015
|
|
2014
|
|
% Change
|
|||||
Gross profit
|
|
$
|
176.9
|
|
|
$
|
179.7
|
|
|
-1.6
|
%
|
Gross profit % of sales
|
|
49.6
|
%
|
|
50.7
|
%
|
|
|
|||
Research and development
|
|
$
|
26.9
|
|
|
$
|
27.5
|
|
|
-2.2
|
%
|
% of sales
|
|
7.5
|
%
|
|
7.8
|
%
|
|
|
|||
Selling and marketing
|
|
$
|
80.6
|
|
|
$
|
83.2
|
|
|
-3.1
|
%
|
% of sales
|
|
22.6
|
%
|
|
23.5
|
%
|
|
|
|||
General and administrative
|
|
$
|
29.9
|
|
|
$
|
26.6
|
|
|
12.4
|
%
|
% of sales
|
|
8.4
|
%
|
|
7.5
|
%
|
|
|
|||
Medical device excise tax
|
|
$
|
4.1
|
|
|
$
|
3.8
|
|
|
7.9
|
%
|
% of sales
|
|
1.2
|
%
|
|
1.1
|
%
|
|
|
|
|
For the year ended May 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
||||||
Amortization of intangibles
|
|
$
|
17.9
|
|
|
$
|
16.6
|
|
|
$
|
1.3
|
|
Change in fair value of contingent consideration
|
|
$
|
(8.2
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(6.4
|
)
|
Acquisition, restructuring and other items, net
|
|
$
|
26.6
|
|
|
$
|
10.8
|
|
|
$
|
15.8
|
|
Other expense
|
|
$
|
(7.0
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
0.2
|
|
|
|
For year ended May 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Income tax expense (benefit)
|
|
$
|
(4.7
|
)
|
|
$
|
3.1
|
|
Effective tax rate including discrete items
|
|
59
|
%
|
|
54
|
%
|
|
For the years ended May 31,
|
||||||||||||
|
2014
|
|
% of Net Sales
|
|
2013
|
|
% of Net Sales
|
||||||
Net Sales by Product Category
|
|
|
|
|
|
|
|
||||||
Peripheral Vascular
|
$
|
192,626
|
|
|
54
|
%
|
|
$
|
179,573
|
|
|
53
|
%
|
Vascular Access
|
106,394
|
|
|
30
|
%
|
|
106,690
|
|
|
31
|
%
|
||
Oncology/Surgery
|
49,360
|
|
|
14
|
%
|
|
47,155
|
|
|
14
|
%
|
||
Total Excluding Supply Agreement
|
348,380
|
|
|
98
|
%
|
|
333,418
|
|
|
98
|
%
|
||
Supply Agreement
|
6,045
|
|
|
2
|
%
|
|
8,498
|
|
|
2
|
%
|
||
Total
|
$
|
354,425
|
|
|
100
|
%
|
|
$
|
341,916
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
||||||
Net Sales by Geography
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
280,161
|
|
|
79
|
%
|
|
$
|
266,228
|
|
|
78
|
%
|
International
|
68,219
|
|
|
19
|
%
|
|
67,190
|
|
|
20
|
%
|
||
Supply Agreement
|
6,045
|
|
|
2
|
%
|
|
8,498
|
|
|
2
|
%
|
||
Total
|
$
|
354,425
|
|
|
100
|
%
|
|
$
|
341,916
|
|
|
4
|
%
|
|
|
For the year ended May 31,
|
|||||||||
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Gross profit
|
|
$
|
179.7
|
|
|
$
|
168.5
|
|
|
6.6
|
%
|
Gross profit % of sales
|
|
50.7
|
%
|
|
49.3
|
%
|
|
|
|||
Research and development
|
|
$
|
27.5
|
|
|
$
|
26.3
|
|
|
4.6
|
%
|
% of sales
|
|
7.8
|
%
|
|
7.7
|
%
|
|
|
|||
Selling and marketing
|
|
$
|
83.2
|
|
|
$
|
76.1
|
|
|
9.3
|
%
|
% of sales
|
|
23.5
|
%
|
|
22.3
|
%
|
|
|
|||
General and administrative
|
|
$
|
26.6
|
|
|
$
|
26.2
|
|
|
1.5
|
%
|
% of sales
|
|
7.5
|
%
|
|
7.7
|
%
|
|
|
|||
Medical device excise tax
|
|
$
|
3.8
|
|
|
$
|
1.6
|
|
|
137.5
|
%
|
% of sales
|
|
1.1
|
%
|
|
0.5
|
%
|
|
|
|
|
For the year ended May 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
$ Change
|
||||||
Amortization of intangibles
|
|
$
|
16.6
|
|
|
$
|
16.6
|
|
|
$
|
—
|
|
Change in fair value of contingent consideration
|
|
$
|
(1.8
|
)
|
|
$
|
1.6
|
|
|
$
|
(3.4
|
)
|
Acquisition, restructuring and other items, net
|
|
$
|
10.8
|
|
|
$
|
13.8
|
|
|
$
|
(3.0
|
)
|
Other expense
|
|
$
|
(7.2
|
)
|
|
$
|
(7.9
|
)
|
|
$
|
0.7
|
|
|
|
For year ended May 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Income tax expense (benefit)
|
|
$
|
3.1
|
|
|
$
|
(0.4
|
)
|
Effective tax rate including discrete items
|
|
54
|
%
|
|
24
|
%
|
|
For the year ended May 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
26,242
|
|
|
$
|
24,681
|
|
|
$
|
26,652
|
|
Investing activities
|
(13,293
|
)
|
|
(16,448
|
)
|
|
(22,238
|
)
|
|||
Financing activities
|
(10,465
|
)
|
|
(14,016
|
)
|
|
(6,286
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(198
|
)
|
|
86
|
|
|
(65
|
)
|
|||
Net change in cash and cash equivalents
|
$
|
2,286
|
|
|
$
|
(5,697
|
)
|
|
$
|
(1,937
|
)
|
|
Cash Payments Due By Period as of May 31, 2015
|
||||||||||||||||||
|
Total
|
|
Less than
One Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5
Years
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long term debt and interest
|
$
|
144,646
|
|
|
$
|
11,288
|
|
|
$
|
133,358
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases(1)
|
9,896
|
|
|
2,191
|
|
|
5,956
|
|
|
1,749
|
|
|
—
|
|
|||||
Purchase obligations(1)
|
9,940
|
|
|
9,940
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition-related future obligations (2)
|
54,005
|
|
|
10,100
|
|
|
25,164
|
|
|
9,822
|
|
|
8,919
|
|
|||||
|
$
|
218,487
|
|
|
$
|
33,519
|
|
|
$
|
164,478
|
|
|
$
|
11,571
|
|
|
$
|
8,919
|
|
(1)
|
The non-cancelable operating leases and inventory purchase obligations are not reflected on our consolidated balance sheets under accounting principles generally accepted in the United States of America.
|
(2)
|
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.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that our receipts and expenditures are being made only in accordance with authorizations of our management and members of our board of directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
•
|
Hired additional full-time and temporary accounting resources with appropriate levels of experience, including a new Global Controller, Assistant Controller, Senior Accounting Manager and Tax Director to drive improvement of and oversee day-to-day accounting activities.
|
•
|
Implemented an account reconciliation policy and monitoring program.
|
•
|
Added financial planning and analysis resources to strengthen our overall internal control environment.
|
•
|
Reallocated responsibilities across our accounting organization to ensure the appropriate level of knowledge and experience is applied based on risk and complexity.
|
•
|
Commenced a detailed review of our ERP to identify opportunities to improve the accuracy of routine transaction processing, specifically with respect to accounting transactions related to purchasing and payables.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
47
|
|
|
48
|
|
|
49
|
|
|
50
|
|
|
51
|
|
|
52
|
|
|
54
|
|
82
|
|
|
Years ended
|
||||||||||
|
May 31,
2015 |
|
May 31,
2014 |
|
May 31,
2013 |
||||||
Net sales
|
$
|
356,974
|
|
|
$
|
354,425
|
|
|
$
|
341,916
|
|
Cost of sales
|
180,085
|
|
|
174,757
|
|
|
173,402
|
|
|||
Gross profit
|
176,889
|
|
|
179,668
|
|
|
168,514
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Research and development
|
26,931
|
|
|
27,486
|
|
|
26,319
|
|
|||
Sales and marketing
|
80,623
|
|
|
83,200
|
|
|
76,121
|
|
|||
General and administrative
|
29,871
|
|
|
26,639
|
|
|
26,186
|
|
|||
Amortization of intangibles
|
17,912
|
|
|
16,622
|
|
|
16,617
|
|
|||
Change in fair value of contingent consideration
|
(8,196
|
)
|
|
(1,808
|
)
|
|
1,583
|
|
|||
Acquisition, restructuring and other items, net
|
26,600
|
|
|
10,760
|
|
|
13,800
|
|
|||
Medical device excise tax
|
4,142
|
|
|
3,829
|
|
|
1,600
|
|
|||
Total operating expenses
|
177,883
|
|
|
166,728
|
|
|
162,226
|
|
|||
Operating income (loss)
|
(994
|
)
|
|
12,940
|
|
|
6,288
|
|
|||
Other (expenses) income
|
|
|
|
|
|
||||||
Interest income
|
4
|
|
|
—
|
|
|
103
|
|
|||
Interest expense
|
(3,197
|
)
|
|
(3,656
|
)
|
|
(5,271
|
)
|
|||
Other expense
|
(3,812
|
)
|
|
(3,544
|
)
|
|
(2,707
|
)
|
|||
Total other expenses, net
|
(7,005
|
)
|
|
(7,200
|
)
|
|
(7,875
|
)
|
|||
Income (loss) before income tax expense (benefit)
|
(7,999
|
)
|
|
5,740
|
|
|
(1,587
|
)
|
|||
Income tax expense (benefit)
|
(4,731
|
)
|
|
3,074
|
|
|
(376
|
)
|
|||
Net income (loss)
|
$
|
(3,268
|
)
|
|
$
|
2,666
|
|
|
$
|
(1,211
|
)
|
Earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.09
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.03
|
)
|
Diluted
|
$
|
(0.09
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.03
|
)
|
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
35,683
|
|
|
35,136
|
|
|
34,817
|
|
|||
Diluted
|
35,683
|
|
|
35,440
|
|
|
34,817
|
|
|
Years ended
|
||||||||||
|
May 31, 2015
|
|
May 31, 2014
|
|
May 31, 2013
|
||||||
Net income (loss)
|
$
|
(3,268
|
)
|
|
$
|
2,666
|
|
|
$
|
(1,211
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on marketable securities
|
(120
|
)
|
|
(16
|
)
|
|
184
|
|
|||
Unrealized gain (loss) on interest rate swap
|
296
|
|
|
(32
|
)
|
|
(522
|
)
|
|||
Foreign currency translation gain (loss)
|
(411
|
)
|
|
295
|
|
|
(47
|
)
|
|||
Other comprehensive income (loss), before tax
|
(235
|
)
|
|
247
|
|
|
(385
|
)
|
|||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
(64
|
)
|
|
18
|
|
|
125
|
|
|||
Other comprehensive income (loss), net of tax
|
(299
|
)
|
|
265
|
|
|
(260
|
)
|
|||
Total comprehensive income (loss), net of tax
|
$
|
(3,567
|
)
|
|
$
|
2,931
|
|
|
$
|
(1,471
|
)
|
|
May 31,
2015 |
|
May 31,
2014 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,391
|
|
|
$
|
16,105
|
|
Marketable securities, at fair value
|
1,689
|
|
|
1,809
|
|
||
Accounts receivable, net of allowances of $3,043 and $1,736, respectively
|
58,428
|
|
|
61,968
|
|
||
Inventories
|
67,388
|
|
|
61,234
|
|
||
Deferred income taxes, current
|
4,364
|
|
|
4,625
|
|
||
Prepaid income taxes
|
770
|
|
|
510
|
|
||
Prepaid expenses and other
|
4,783
|
|
|
5,471
|
|
||
Total current assets
|
155,813
|
|
|
151,722
|
|
||
Property, Plant and Equipment, net
|
54,560
|
|
|
66,590
|
|
||
Other Assets
|
5,288
|
|
|
4,447
|
|
||
Intangible Assets, net
|
181,806
|
|
|
205,256
|
|
||
Goodwill
|
361,252
|
|
|
360,473
|
|
||
Deferred Income Taxes, long term
|
14,904
|
|
|
10,403
|
|
||
Total Assets
|
$
|
773,623
|
|
|
$
|
798,891
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
23,668
|
|
|
$
|
32,895
|
|
Accrued liabilities
|
18,331
|
|
|
17,251
|
|
||
Income taxes payable
|
439
|
|
|
689
|
|
||
Current portion of long-term debt
|
8,750
|
|
|
5,000
|
|
||
Current portion of contingent consideration
|
9,969
|
|
|
10,918
|
|
||
Total current liabilities
|
61,157
|
|
|
66,753
|
|
||
Long-term Debt, net of current portion
|
128,910
|
|
|
137,660
|
|
||
Deferred Income Taxes, long term
|
1,119
|
|
|
1,146
|
|
||
Contingent Consideration, net of current portion
|
37,415
|
|
|
56,413
|
|
||
Other Long Term Liabilities
|
—
|
|
|
84
|
|
||
Total Liabilities
|
228,601
|
|
|
262,056
|
|
||
Commitments and Contingencies (Note O)
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Preferred stock, par value $.01 per share, 5,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $.01 per share, 75,000,000 and 45,000,000 shares authorized; 36,043,725 and 35,442,004 shares issued and outstanding at May 31, 2015 and 2014, respectively
|
360
|
|
|
353
|
|
||
Additional paid-in capital
|
520,101
|
|
|
508,354
|
|
||
Retained earnings
|
28,233
|
|
|
31,501
|
|
||
Treasury stock, 142,305 shares, at cost
|
(2,104
|
)
|
|
(2,104
|
)
|
||
Accumulated other comprehensive loss
|
(1,568
|
)
|
|
(1,269
|
)
|
||
Total Stockholders' Equity
|
545,022
|
|
|
536,835
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
773,623
|
|
|
$
|
798,891
|
|
|
Common Stock
|
|
Additional
paid in
capital
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Treasury Stock
|
|
Total
|
||||||||||||||||||
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
||||||||||||||||||||
Balance at May 31, 2012
|
34,826,531
|
|
|
$
|
348
|
|
|
$
|
496,375
|
|
|
$
|
30,046
|
|
|
$
|
(1,274
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
523,391
|
|
Net loss
|
|
|
|
|
|
|
(1,211
|
)
|
|
|
|
|
|
|
|
(1,211
|
)
|
||||||||||||
Exercise of stock options
|
16,835
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|||||||||||
Tax effect of exercise of stock options
|
|
|
|
|
(1,644
|
)
|
|
|
|
|
|
|
|
|
|
(1,644
|
)
|
||||||||||||
Issuance of restricted shares, net
|
93,429
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|||||||||||
Purchase of common stock under Employee Stock Purchase Plan
|
123,556
|
|
|
2
|
|
|
1,209
|
|
|
|
|
|
|
|
|
|
|
1,211
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
4,609
|
|
|
|
|
|
|
|
|
|
|
4,609
|
|
||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
(260
|
)
|
|
|
|
|
|
(260
|
)
|
||||||||||||
Balance at May 31, 2013
|
35,060,351
|
|
|
$
|
351
|
|
|
$
|
500,554
|
|
|
$
|
28,835
|
|
|
$
|
(1,534
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
526,102
|
|
Net income
|
|
|
|
|
|
|
2,666
|
|
|
|
|
|
|
|
|
2,666
|
|
||||||||||||
Exercise of stock options
|
105,676
|
|
|
|
|
1,085
|
|
|
|
|
|
|
|
|
|
|
1,085
|
|
|||||||||||
Tax effect of exercise of stock options
|
|
|
|
|
(146
|
)
|
|
|
|
|
|
|
|
|
|
(146
|
)
|
||||||||||||
Issuance of restricted shares, net
|
129,702
|
|
|
1
|
|
|
(1,358
|
)
|
|
|
|
|
|
|
|
|
|
(1,357
|
)
|
||||||||||
Purchase of common stock under Employee Stock Purchase Plan
|
146,275
|
|
|
1
|
|
|
2,717
|
|
|
|
|
|
|
|
|
|
|
2,718
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
5,502
|
|
|
|
|
|
|
|
|
|
|
5,502
|
|
||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
265
|
|
|
|
|
|
|
265
|
|
||||||||||||
Balance at May 31, 2014
|
35,442,004
|
|
|
$
|
353
|
|
|
$
|
508,354
|
|
|
$
|
31,501
|
|
|
$
|
(1,269
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
536,835
|
|
Net loss
|
|
|
|
|
|
|
(3,268
|
)
|
|
|
|
|
|
|
|
(3,268
|
)
|
||||||||||||
Exercise of stock options
|
341,446
|
|
|
3
|
|
|
4,335
|
|
|
|
|
|
|
|
|
|
|
4,338
|
|
||||||||||
Tax effect of exercise of stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Issuance of restricted shares, net
|
141,274
|
|
|
2
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
2
|
|
||||||||||
Purchase of common stock under Employee Stock Purchase Plan
|
119,001
|
|
|
2
|
|
|
1,414
|
|
|
|
|
|
|
|
|
|
|
1,416
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
5,998
|
|
|
|
|
|
|
|
|
|
|
5,998
|
|
||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
(299
|
)
|
|
|
|
|
|
(299
|
)
|
||||||||||||
Balance at May 31, 2015
|
36,043,725
|
|
|
$
|
360
|
|
|
$
|
520,101
|
|
|
$
|
28,233
|
|
|
$
|
(1,568
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
545,022
|
|
|
Years ended
|
||||||||||
|
May 31,
2015 |
|
May 31,
2014 |
|
May 31,
2013 |
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(3,268
|
)
|
|
$
|
2,666
|
|
|
$
|
(1,211
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
30,492
|
|
|
28,157
|
|
|
27,227
|
|
|||
Amortization of acquired inventory basis step-up
|
—
|
|
|
150
|
|
|
3,845
|
|
|||
Tax effect of exercise of stock options and issuance of performance shares
|
—
|
|
|
(146
|
)
|
|
(1,644
|
)
|
|||
Deferred income tax provision
|
(5,111
|
)
|
|
2,951
|
|
|
666
|
|
|||
Stock based compensation
|
5,998
|
|
|
5,502
|
|
|
4,609
|
|
|||
Changes in accounts receivable allowances
|
1,448
|
|
|
465
|
|
|
338
|
|
|||
Gain on sales of assets
|
—
|
|
|
—
|
|
|
(711
|
)
|
|||
Change in fair value of contingent consideration
|
(8,196
|
)
|
|
(1,808
|
)
|
|
1,583
|
|
|||
Loss on impairment/disposal of long-term assets
|
9,381
|
|
|
—
|
|
|
1,416
|
|
|||
Loss on impairment of intangible assets
|
6,400
|
|
|
—
|
|
|
—
|
|
|||
Other
|
34
|
|
|
(17
|
)
|
|
157
|
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
2,095
|
|
|
(14,786
|
)
|
|
1,020
|
|
|||
Inventories
|
(6,154
|
)
|
|
(5,608
|
)
|
|
(1,909
|
)
|
|||
Prepaid expenses and other
|
(1,000
|
)
|
|
497
|
|
|
977
|
|
|||
Accounts payable and accrued liabilities
|
(5,877
|
)
|
|
6,658
|
|
|
(9,711
|
)
|
|||
Net cash provided by operating activities
|
26,242
|
|
|
24,681
|
|
|
26,652
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(11,940
|
)
|
|
(11,172
|
)
|
|
(12,120
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(4,169
|
)
|
|
(24,474
|
)
|
|||
Acquisition of intangible assets
|
(1,353
|
)
|
|
(1,435
|
)
|
|
(800
|
)
|
|||
Other cash flows from investing activities
|
—
|
|
|
—
|
|
|
801
|
|
|||
Change in escrow receivable
|
—
|
|
|
—
|
|
|
2,500
|
|
|||
Purchases of marketable securities
|
—
|
|
|
(25
|
)
|
|
(5,134
|
)
|
|||
Proceeds from sale or maturity of marketable securities
|
—
|
|
|
353
|
|
|
16,989
|
|
|||
Net cash used in investing activities
|
(13,293
|
)
|
|
(16,448
|
)
|
|
(22,238
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Repayment of long-term debt
|
(20,000
|
)
|
|
(146,250
|
)
|
|
(7,500
|
)
|
|||
Proceeds from issuance of and borrowings on long-term debt
|
15,000
|
|
|
146,410
|
|
|
—
|
|
|||
Proceeds from exercise of stock options and ESPP
|
5,757
|
|
|
2,444
|
|
|
1,214
|
|
|||
Payment of acquisition related contingent consideration
|
(11,222
|
)
|
|
(15,943
|
)
|
|
—
|
|
|||
Deferred financing costs on long-term debt
|
—
|
|
|
(677
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(10,465
|
)
|
|
(14,016
|
)
|
|
(6,286
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(198
|
)
|
|
86
|
|
|
(65
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
2,286
|
|
|
(5,697
|
)
|
|
(1,937
|
)
|
|||
Cash and cash equivalents at beginning of year
|
16,105
|
|
|
21,802
|
|
|
23,739
|
|
|||
Cash and cash equivalents at end of year
|
$
|
18,391
|
|
|
$
|
16,105
|
|
|
$
|
21,802
|
|
|
Years ended
|
||||||||||
|
May 31,
2015
|
|
May 31,
2014
|
|
May 31,
2013
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Supplemental disclosure of non-cash operating, investing and financing activities:
|
|
|
|
|
|
||||||
Contractual obligations for acquisition of fixed assets
|
$
|
140
|
|
|
$
|
4,970
|
|
|
$
|
1,549
|
|
Contractual obligations for acquisition of intangibles and business
|
—
|
|
|
2,249
|
|
|
78,286
|
|
|||
Contractual obligations for tax basis adjustment
|
779
|
|
|
—
|
|
|
—
|
|
|||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
3,151
|
|
|
$
|
3,591
|
|
|
$
|
4,936
|
|
Income taxes
|
699
|
|
|
182
|
|
|
200
|
|
|
|
Estimated useful lives
|
Building and building improvements
|
|
39 years
|
Machinery and equipment
|
|
3 to 8 years
|
Computer software and equipment
|
|
3 to 10 years
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities. Level 1 assets include money market funds that are traded in an active exchange market.
|
Level 2
|
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. When quoted market prices are unobservable, we obtain pricing information from an independent pricing vendor. The pricing vendor uses various pricing models for each asset class that are consistent with what other market participants would use. The inputs and assumptions to the model of the pricing vendor are derived from market observable sources including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. The pricing vendor considers all available market observable inputs in determining the evaluation for a security. Thus, certain securities may not be priced using quoted prices, but rather determined from market observable information. Included in Level 2 assets is our interest rate swap agreement which is valued using a mid-market valuation model.
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes the auction rate securities where independent pricing information was not able to be obtained and the contingent considerations related to the acquisition of Vortex, Microsulis and Clinical Devices. Our investments in auction-rate securities were classified as Level 3 as quoted prices were unavailable since these auction rate securities issued by New York state and local government authorities failed auction. Due to limited market information, we utilized a discounted cash flow (“DCF”) model to derive an estimate of fair value for contingent considerations for all periods presented. The assumptions used in preparing the DCF model included estimates with respect to the amount and timing of future interest and principal payments, forward projections of the interest rate benchmarks, the probability of full repayment of the principal considering the credit quality and guarantees in place, and the rate of return required by investors to own such securities given the current liquidity risk associated with auction-rate securities.
|
|
Fair Value Measurements
using inputs considered as:
|
|
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value at May 31, 2015
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
|
|
|
|
|
|
|
||||||||
New York State government agency obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,689
|
|
|
$
|
1,689
|
|
Total
|
—
|
|
|
—
|
|
|
1,689
|
|
|
1,689
|
|
||||
Total Financial Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,689
|
|
|
$
|
1,689
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
257
|
|
|
$
|
—
|
|
|
$
|
257
|
|
Contingent liability for acquisition earn out
|
—
|
|
|
—
|
|
|
47,384
|
|
|
47,384
|
|
||||
Total Financial Liabilities
|
$
|
—
|
|
|
$
|
257
|
|
|
$
|
47,384
|
|
|
$
|
47,641
|
|
|
Fair Value Measurements
using inputs considered as:
|
|
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value at May 31, 2014
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
445
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
445
|
|
Total
|
445
|
|
|
—
|
|
|
—
|
|
|
445
|
|
||||
Marketable securities
|
|
|
|
|
|
|
|
||||||||
New York State government agency obligations
|
—
|
|
|
—
|
|
|
1,809
|
|
|
1,809
|
|
||||
Total
|
—
|
|
|
—
|
|
|
1,809
|
|
|
1,809
|
|
||||
Total Financial Assets
|
$
|
445
|
|
|
$
|
—
|
|
|
$
|
1,809
|
|
|
$
|
2,254
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
555
|
|
|
$
|
—
|
|
|
$
|
555
|
|
Contingent liability for acquisition earn out
|
—
|
|
|
—
|
|
|
67,331
|
|
|
67,331
|
|
||||
Total Financial Liabilities
|
$
|
—
|
|
|
$
|
555
|
|
|
$
|
67,331
|
|
|
$
|
67,886
|
|
|
Financial Assets
|
|
Financial Liabilities
|
||||
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
|
Fair Value Measurements
Using Significant Unobservable Inputs |
||||
Balance at May 31, 2014
|
$
|
1,809
|
|
|
$
|
67,331
|
|
Change in fair value of contingent consideration (1)
|
—
|
|
|
(8,196
|
)
|
||
Currency (gain) loss from remeasurement
|
—
|
|
|
(529
|
)
|
||
Included in other comprehensive income (loss)
|
(120
|
)
|
|
—
|
|
||
Contingent consideration payments
|
—
|
|
|
(11,222
|
)
|
||
Balance at May 31, 2015
|
$
|
1,689
|
|
|
$
|
47,384
|
|
|
Financial Assets
|
|
Financial Liabilities
|
||||
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
|
Fair Value Measurements
Using Significant Unobservable Inputs |
||||
Balance at May 31, 2013
|
$
|
1,850
|
|
|
$
|
75,049
|
|
Change in fair value of contingent consideration (1)
|
—
|
|
|
(1,808
|
)
|
||
New contingent consideration
|
—
|
|
|
4,970
|
|
||
Currency (gain) loss from remeasurement
|
—
|
|
|
—
|
|
||
Included in other comprehensive income (loss)
|
(41
|
)
|
|
—
|
|
||
Contingent consideration payments
|
—
|
|
|
(10,880
|
)
|
||
Balance at May 31, 2014
|
$
|
1,809
|
|
|
$
|
67,331
|
|
|
Fair value at
May 31, 2015
|
|
Valuation
Technique
|
|
Unobservable
Input
|
|
Range
|
||
Revenue based payments
|
$
|
44,716
|
|
|
Discounted cash flow
|
|
Discount rate
Probability of payment Projected fiscal year of payment |
|
4%
75% - 100% 2016 - 2022 |
Milestone based payments
|
2,668
|
|
|
Discounted cash flow
|
|
Discount rate
Probability of payment Projected fiscal year of payment |
|
16%
75% - 100% 2017 |
|
|
$
|
47,384
|
|
|
|
|
|
|
|
|
Amortized
cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
(in thousands)
|
||||||||||||||
Available-for-sales securities
|
|
|
|
|
|
|
|
||||||||
New York State government agency obligations
|
$
|
1,825
|
|
|
$
|
—
|
|
|
$
|
(136
|
)
|
|
$
|
1,689
|
|
|
$
|
1,825
|
|
|
$
|
—
|
|
|
$
|
(136
|
)
|
|
$
|
1,689
|
|
|
Amortized
cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
(in thousands)
|
||||||||||||||
Available-for-sales securities
|
|
|
|
|
|
|
|
||||||||
New York State government agency obligations
|
$
|
1,825
|
|
|
$
|
—
|
|
|
$
|
(16
|
)
|
|
$
|
1,809
|
|
|
$
|
1,825
|
|
|
$
|
—
|
|
|
$
|
(16
|
)
|
|
$
|
1,809
|
|
|
Amortized
cost
|
|
Fair
Value
|
||||
|
(in thousands)
|
||||||
As of May 31, 2015:
|
|
|
|
||||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
Due after one through five years
|
—
|
|
|
—
|
|
||
Due after five through twenty years
|
1,825
|
|
|
1,689
|
|
||
|
$
|
1,825
|
|
|
$
|
1,689
|
|
|
May 31, 2015
|
|
May 31, 2014
|
||||
|
(in thousands)
|
||||||
Raw materials
|
$
|
28,040
|
|
|
$
|
24,734
|
|
Work in process
|
11,910
|
|
|
11,992
|
|
||
Finished goods
|
27,438
|
|
|
24,508
|
|
||
Total
|
$
|
67,388
|
|
|
$
|
61,234
|
|
|
May 31, 2015
|
|
May 31, 2014
|
||||
|
(in thousands)
|
||||||
Deposits
|
$
|
2,011
|
|
|
$
|
3,356
|
|
Other prepaid taxes
|
165
|
|
|
202
|
|
||
License fees
|
121
|
|
|
604
|
|
||
Software licenses
|
667
|
|
|
130
|
|
||
Trade shows
|
279
|
|
|
62
|
|
||
Rent
|
77
|
|
|
114
|
|
||
Other
|
1,463
|
|
|
1,003
|
|
||
Total
|
$
|
4,783
|
|
|
$
|
5,471
|
|
|
May 31, 2015
|
|
May 31, 2014
|
||||
|
(in thousands)
|
||||||
Building and building improvements
|
$
|
33,853
|
|
|
$
|
33,126
|
|
Machinery and equipment
|
23,626
|
|
|
31,880
|
|
||
Computer software and equipment
|
24,431
|
|
|
25,836
|
|
||
Construction in progress
|
7,143
|
|
|
12,564
|
|
||
|
89,053
|
|
|
103,406
|
|
||
Less accumulated depreciation and amortization
|
(36,197
|
)
|
|
(37,845
|
)
|
||
|
52,856
|
|
|
65,561
|
|
||
Land and land improvements
|
1,704
|
|
|
1,029
|
|
||
|
$
|
54,560
|
|
|
$
|
66,590
|
|
|
May 31, 2015
|
||||||||||||
|
Gross carrying
value
|
|
Accumulated
amortization
|
|
Net carrying
value
|
|
Weighted average
useful life
|
||||||
|
(in thousands)
|
|
(years)
|
||||||||||
Product technologies
|
$
|
148,776
|
|
|
$
|
(41,447
|
)
|
|
$
|
107,329
|
|
|
10.2
|
Customer relationships
|
86,371
|
|
|
(42,813
|
)
|
|
43,558
|
|
|
12.0
|
|||
Trademarks
|
28,545
|
|
|
(3,229
|
)
|
|
25,316
|
|
|
10.7
|
|||
In process R&D Acquired
|
3,600
|
|
|
—
|
|
|
3,600
|
|
|
Indefinite
|
|||
Licenses
|
7,913
|
|
|
(5,910
|
)
|
|
2,003
|
|
|
8.3
|
|||
Distributor relationships
|
900
|
|
|
(900
|
)
|
|
—
|
|
|
3.0
|
|||
|
$
|
276,105
|
|
|
$
|
(94,299
|
)
|
|
$
|
181,806
|
|
|
|
|
May 31, 2014
|
||||||||||||
|
Gross carrying
value
|
|
Accumulated
amortization
|
|
Net carrying
value
|
|
Weighted avg
useful life
|
||||||
|
(in thousands)
|
|
(years)
|
||||||||||
Product technologies
|
$
|
150,298
|
|
|
$
|
(32,930
|
)
|
|
$
|
117,368
|
|
|
10.2
|
Customer relationships
|
86,645
|
|
|
(37,848
|
)
|
|
48,797
|
|
|
11.9
|
|||
Trademark—NAMIC
|
28,600
|
|
|
—
|
|
|
28,600
|
|
|
Indefinite
|
|||
In process R&D Acquired
|
3,600
|
|
|
—
|
|
|
3,600
|
|
|
Indefinite
|
|||
Licenses
|
7,639
|
|
|
(5,211
|
)
|
|
2,428
|
|
|
8.4
|
|||
Trademarks
|
6,345
|
|
|
(1,882
|
)
|
|
4,463
|
|
|
8.0
|
|||
Distributor relationships
|
900
|
|
|
(900
|
)
|
|
—
|
|
|
3.0
|
|||
|
$
|
284,027
|
|
|
$
|
(78,771
|
)
|
|
$
|
205,256
|
|
|
|
2016
|
$
|
18,452
|
|
2017
|
$
|
18,568
|
|
2018
|
$
|
19,388
|
|
2019
|
$
|
21,499
|
|
2020
|
$
|
22,741
|
|
|
Total
|
||
Balance, May 31, 2013
|
$
|
355,637
|
|
Acquisition of Clinical Devices B.V.
|
4,836
|
|
|
Balance, May 31, 2014
|
$
|
360,473
|
|
Tax basis adjustment
|
779
|
|
|
Balance, May 31, 2015
|
$
|
361,252
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
(Loss) income before tax provision:
|
|
|
|
|
|
||||||
US
|
$
|
(8,833
|
)
|
|
$
|
5,199
|
|
|
$
|
(3,614
|
)
|
Non-US
|
834
|
|
|
541
|
|
|
2,027
|
|
|||
|
$
|
(7,999
|
)
|
|
$
|
5,740
|
|
|
$
|
(1,587
|
)
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
(242
|
)
|
|
$
|
(133
|
)
|
|
$
|
(1,622
|
)
|
State and local
|
205
|
|
|
99
|
|
|
(52
|
)
|
|||
Non U.S.
|
417
|
|
|
157
|
|
|
468
|
|
|||
|
380
|
|
|
123
|
|
|
(1,206
|
)
|
|||
Deferred
|
(5,111
|
)
|
|
2,951
|
|
|
830
|
|
|||
Income tax (benefit) provision
|
$
|
(4,731
|
)
|
|
$
|
3,074
|
|
|
$
|
(376
|
)
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Deferred tax benefit
|
$
|
(1,916
|
)
|
|
$
|
1,778
|
|
|
$
|
830
|
|
Impact of NYS tax reform legislation
|
—
|
|
|
1,173
|
|
|
—
|
|
|||
Net operating loss carryforward
|
(3,195
|
)
|
|
—
|
|
|
—
|
|
|||
|
$
|
(5,111
|
)
|
|
$
|
2,951
|
|
|
$
|
830
|
|
|
May 31, 2015
|
|
May 31, 2014
|
||||
|
(in thousands)
|
||||||
Deferred tax assets
|
|
|
|
||||
Net operating loss carryforward
|
$
|
51,785
|
|
|
$
|
48,749
|
|
Stock-based compensation
|
4,468
|
|
|
4,851
|
|
||
Federal and state R&D tax credit carryforward
|
1,646
|
|
|
1,249
|
|
||
Inventories
|
2,808
|
|
|
875
|
|
||
Expenses incurred not currently deductible
|
2,107
|
|
|
1,379
|
|
||
Accrued liabilities
|
114
|
|
|
154
|
|
||
Gross deferred tax asset
|
62,928
|
|
|
57,257
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Excess tax over book depreciation and amortization
|
42,988
|
|
|
41,843
|
|
||
|
42,988
|
|
|
41,843
|
|
||
Valuation Allowance
|
(1,791
|
)
|
|
(1,532
|
)
|
||
Net deferred tax asset
|
$
|
18,149
|
|
|
$
|
13,882
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Income tax (benefit) provision at statutory tax rate of 35%
|
$
|
(2,800
|
)
|
|
$
|
2,008
|
|
|
$
|
(555
|
)
|
Effect of graduated tax rates
|
80
|
|
|
(57
|
)
|
|
(16
|
)
|
|||
State income taxes, net of Federal tax benefit
|
(17
|
)
|
|
122
|
|
|
95
|
|
|||
State income tax credits, net of Federal tax benefit
|
—
|
|
|
—
|
|
|
(23
|
)
|
|||
Impact of Non US operations
|
133
|
|
|
(27
|
)
|
|
(228
|
)
|
|||
Research and development tax credit
|
(604
|
)
|
|
(236
|
)
|
|
(142
|
)
|
|||
Nondeductible acquisition costs
|
—
|
|
|
—
|
|
|
110
|
|
|||
Nondeductible interest on contingent payments
|
265
|
|
|
540
|
|
|
130
|
|
|||
Nontaxable gain on revaluation of contingent consideration liability
|
(3,138
|
)
|
|
(1,698
|
)
|
|
—
|
|
|||
Tax law changes
|
(454
|
)
|
|
1,173
|
|
|
—
|
|
|||
Effect of elimination of stock compensation APIC pool
|
1,253
|
|
|
440
|
|
|
—
|
|
|||
Nondeductible stock-based compensation
|
—
|
|
|
176
|
|
|
108
|
|
|||
Other nondeductible expenses
|
498
|
|
|
384
|
|
|
336
|
|
|||
Over (under) accrual of prior year Federal and state taxes
|
38
|
|
|
249
|
|
|
(10
|
)
|
|||
Fully reserved capital losses
|
—
|
|
|
—
|
|
|
(179
|
)
|
|||
Other
|
15
|
|
|
—
|
|
|
(2
|
)
|
|||
Income tax (benefit) expense
|
$
|
(4,731
|
)
|
|
$
|
3,074
|
|
|
$
|
(376
|
)
|
|
May 31,
2015
|
|
May 31,
2014
|
||||
|
(in thousands)
|
||||||
Payroll and related expenses
|
$
|
10,330
|
|
|
$
|
8,114
|
|
Royalties
|
2,237
|
|
|
2,620
|
|
||
Accrued severance
|
158
|
|
|
765
|
|
||
Sales and franchise taxes
|
489
|
|
|
1,327
|
|
||
Interest rate swap liability
|
257
|
|
|
555
|
|
||
Outside services
|
1,522
|
|
|
983
|
|
||
Deferred Rent
|
808
|
|
|
154
|
|
||
Other
|
2,530
|
|
|
2,733
|
|
||
Total
|
$
|
18,331
|
|
|
$
|
17,251
|
|
2016
|
$
|
8,750
|
|
2017
|
13,750
|
|
|
2018
|
26,250
|
|
|
2019
|
88,910
|
|
|
2020
|
—
|
|
|
|
$
|
137,660
|
|
|
2015
|
|||||||||||
|
Shares
|
|
Weighted-
average
exercise
price
|
|
Weighted
average
remaining
contractual
life
|
|
Aggregate
intrinsic
value (in
thousands)
|
|||||
Outstanding at beginning of year
|
2,673,751
|
|
|
$
|
14.82
|
|
|
|
|
|
||
Granted
|
561,883
|
|
|
$
|
16.14
|
|
|
|
|
|
||
Exercised
|
(423,804
|
)
|
|
$
|
13.87
|
|
|
|
|
|
||
Forfeited
|
(261,738
|
)
|
|
$
|
14.71
|
|
|
|
|
|
||
Expired
|
(250,779
|
)
|
|
$
|
17.98
|
|
|
|
|
|
||
Outstanding at end of year
|
2,299,313
|
|
|
$
|
14.86
|
|
|
3.89
|
|
$
|
4,571
|
|
Options exercisable at year-end
|
1,271,028
|
|
|
$
|
15.10
|
|
|
2.58
|
|
$
|
2,547
|
|
Options expected to vest in future periods
|
903,143
|
|
|
$
|
14.56
|
|
|
5.52
|
|
$
|
1,778
|
|
Range of exercise prices
|
Number
outstanding |
|
Weighted-
average remaining life in years |
|
Weighted-
average exercise price |
|
Number
Exercisable |
|
Weighted-
average exercise price |
||||||
$10.25 - $14.24
|
1,403,859
|
|
|
4.09
|
|
$
|
12.94
|
|
|
793,406
|
|
|
$
|
13.03
|
|
$14.25 - $18.24
|
564,416
|
|
|
4.13
|
|
15.96
|
|
|
251,584
|
|
|
15.51
|
|
||
$18.25 - $22.24
|
217,069
|
|
|
3.75
|
|
19.38
|
|
|
112,069
|
|
|
19.35
|
|
||
$22.25 - $26.24
|
99,908
|
|
|
0.43
|
|
23.94
|
|
|
99,908
|
|
|
23.94
|
|
||
$26.25 - $30.24
|
14,061
|
|
|
0.94
|
|
28.10
|
|
|
14,061
|
|
|
28.10
|
|
||
|
2,299,313
|
|
|
3.89
|
|
$
|
14.86
|
|
|
1,271,028
|
|
|
$
|
15.10
|
|
|
Non-Vested Stock
Award Units
|
|
Weighted Average
Grant-Date Fair Value
|
|||
Non-vested at beginning of year
|
587,991
|
|
|
$
|
14.82
|
|
Granted
|
242,158
|
|
|
$
|
14.75
|
|
Vested
|
(160,207
|
)
|
|
$
|
14.83
|
|
Canceled
|
(106,841
|
)
|
|
$
|
12.33
|
|
Non-vested at end of year
|
563,101
|
|
|
$
|
13.73
|
|
Awards expected to vest in future periods
|
492,432
|
|
|
$
|
13.73
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Basic
|
35,683,139
|
|
|
35,135,689
|
|
|
34,817,279
|
|
Effect of dilutive securities
|
—
|
|
|
304,161
|
|
|
—
|
|
Diluted
|
35,683,139
|
|
|
35,439,850
|
|
|
34,817,279
|
|
|
|
|
|
|
|
|||
Securities excluded as their inclusion would be anti-dilutive
|
2,862,414
|
|
|
2,347,426
|
|
|
2,904,944
|
|
2016
|
$
|
2,192
|
|
2017
|
2,013
|
|
|
2018
|
1,980
|
|
|
2019
|
1,962
|
|
|
2020
|
1,749
|
|
|
|
$
|
9,896
|
|
|
Year Ended
|
||||||||||
|
May 31,
2015 |
|
May 31,
2014 |
|
May 31,
2013 |
||||||
Net sales by Product Category
|
|
|
|
|
|
||||||
Peripheral Vascular
|
$
|
192,833
|
|
|
$
|
192,626
|
|
|
$
|
179,573
|
|
Vascular Access
|
107,874
|
|
|
106,394
|
|
|
106,690
|
|
|||
Oncology/Surgery
|
52,090
|
|
|
49,360
|
|
|
47,155
|
|
|||
Supply Agreement
|
4,177
|
|
|
6,045
|
|
|
8,498
|
|
|||
Total
|
$
|
356,974
|
|
|
$
|
354,425
|
|
|
$
|
341,916
|
|
|
Year Ended
|
||||||||||
|
May 31,
2015 |
|
May 31,
2014 |
|
May 31,
2013 |
||||||
Net sales by Geography
|
|
|
|
|
|
||||||
United States
|
$
|
280,851
|
|
|
$
|
280,161
|
|
|
$
|
266,228
|
|
International
|
71,946
|
|
|
68,219
|
|
|
67,190
|
|
|||
Supply Agreement
|
4,177
|
|
|
6,045
|
|
|
8,498
|
|
|||
Total
|
$
|
356,974
|
|
|
$
|
354,425
|
|
|
$
|
341,916
|
|
|
2015
|
||||||||||||||
|
First
quarter
|
|
Second
quarter
|
|
Third
quarter
|
|
Fourth
quarter
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Net sales
|
$
|
87,331
|
|
|
$
|
92,149
|
|
|
$
|
86,597
|
|
|
$
|
90,897
|
|
Gross profit
|
45,825
|
|
|
47,656
|
|
|
37,851
|
|
|
45,557
|
|
||||
Net income (loss)
|
470
|
|
|
1,338
|
|
|
(4,262
|
)
|
|
(814
|
)
|
||||
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.01
|
|
|
0.04
|
|
|
(0.12
|
)
|
|
(0.02
|
)
|
||||
Diluted
|
0.01
|
|
|
0.04
|
|
|
(0.12
|
)
|
|
(0.02
|
)
|
|
2014
|
||||||||||||||
|
First
quarter
|
|
Second
quarter
|
|
Third
quarter
|
|
Fourth
quarter
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Net sales
|
$
|
83,644
|
|
|
$
|
88,571
|
|
|
$
|
88,150
|
|
|
$
|
94,060
|
|
Gross profit
|
42,580
|
|
|
44,885
|
|
|
44,793
|
|
|
47,410
|
|
||||
Net income (loss)
|
(373
|
)
|
|
(261
|
)
|
|
4,515
|
|
|
(1,215
|
)
|
||||
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
(0.01
|
)
|
|
(0.01
|
)
|
|
0.13
|
|
|
(0.03
|
)
|
||||
Diluted
|
(0.01
|
)
|
|
(0.01
|
)
|
|
0.13
|
|
|
(0.03
|
)
|
|
SCHEDULE II -VALUATION AND QUALIFYING ACCOUNTS
|
||||||||||||||
|
(in thousands)
|
||||||||||||||
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
Description
|
Balance at
Beginning
of Year
|
|
Additions -
Charged to
costs and
expenses
|
|
Deductions
|
|
Balance at
End of Period
|
||||||||
Year Ended May 31, 2013
|
|
|
|
|
|
|
|
||||||||
Allowance for deferred tax asset (a)
|
1,196
|
|
|
—
|
|
|
(484
|
)
|
|
712
|
|
||||
Allowance for sales returns and doubtful accounts (b)
|
933
|
|
|
4,134
|
|
|
(3,795
|
)
|
|
1,272
|
|
||||
Totals
|
$
|
2,129
|
|
|
$
|
4,134
|
|
|
$
|
(4,279
|
)
|
|
$
|
1,984
|
|
Year Ended May 31, 2014
|
|
|
|
|
|
|
|
||||||||
Allowance for deferred tax asset (a)
|
712
|
|
|
819
|
|
|
—
|
|
|
1,531
|
|
||||
Allowance for sales returns and doubtful accounts (b)
|
1,272
|
|
|
7,342
|
|
|
(6,878
|
)
|
|
1,736
|
|
||||
Totals
|
$
|
1,984
|
|
|
$
|
8,161
|
|
|
$
|
(6,878
|
)
|
|
$
|
3,267
|
|
Year Ended May 31, 2015
|
|
|
|
|
|
|
|
||||||||
Allowance for deferred tax asset (a)
|
1,531
|
|
|
467
|
|
|
(207
|
)
|
|
1,791
|
|
||||
Allowance for sales returns and doubtful accounts (b)
|
1,736
|
|
|
1,846
|
|
|
(539
|
)
|
|
3,043
|
|
||||
Totals
|
$
|
3,267
|
|
|
$
|
2,313
|
|
|
$
|
(746
|
)
|
|
$
|
4,834
|
|
(a)
|
Use of fully reserved capital losses and expiration of fully reserved state tax credits.
|
(b)
|
Previously reserved sales returns and accounts written off as uncollectible.
|
|
|
|
ANGIODYNAMICS, INC.
|
||
Date:
|
|
August 10, 2015
|
By:
|
|
/
S
/ H
OWARD
W. D
ONNELLY
|
|
|
|
|
|
Howard W. Donnelly,
Chairman of the Board, Director
|
Date:
|
|
August 10, 2015
|
/
S
/ H
OWARD
W. D
ONNELLY
|
|
|
|
Howard W. Donnelly,
|
|
|
|
Chairman of the Board, Director
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ J
OSEPH
M. D
E
V
IVO
|
|
|
|
Joseph M. DeVivo,
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ M
ARK
T. F
ROST
|
|
|
|
Mark T. Frost,
|
|
|
|
Executive Vice President—Chief Financial Officer,
Treasurer (Principal Financial and Chief Accounting Officer)
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ W
ESLEY
E. J
OHNSON
, J
R
.
|
|
|
|
Wesley E. Johnson, Jr.,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ J
EFFREY
G. G
OLD
|
|
|
|
Jeffrey G. Gold,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ D
ENNIS
S. M
ETENY
|
|
|
|
Dennis S. Meteny,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ S
TEVEN R.
L
A
P
ORTE
|
|
|
|
Steven R. LaPorte,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ K
EVIN
J. G
OULD
|
|
|
|
Kevin J. Gould,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ D
AVID
B
URGSTAHLER
|
|
|
|
David Burgstahler,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
August 10, 2015
|
/
S
/ S
RIRAM
V
ENKATARAMAN
|
|
|
|
Sriram Venkataraman,
|
|
|
|
Director
|
(b)
|
Exhibits
|
2.1
|
Master Separation and Distribution Agreement, effective as of May 2004, between E-Z-EM, Inc. and AngioDynamics, Inc. (incorporated by reference to Exhibit 10.3 of the Company’s registration statement on Form S-1/A, filed with the Commission on May 12, 2004).
|
2.2
|
Stock Purchase Agreement, dated October 12, 2006, by and between AngioDynamics, Inc., Oncobionic, Inc. and the shareholders of Oncobionic, Inc. (incorporated by reference to Exhibit 2.1 of the Company’s quarterly report on Form 10-Q, filed with the Commission on January 11, 2007).
|
2.3
|
Agreement and Plan of Merger, dated as of November 27, 2006, by and among AngioDynamics, Inc., Royal I, LLC and RITA Medical Systems, Inc. (incorporated by reference to Annex A of the Company’s Registration Statement on Form S-4, filed with the Commission on December 8, 2006).
|
2.4
|
Amendment No. 1, dated December 7, 2006, to the Agreement and Plan of Merger, dated as of November 27, 2006, by and among AngioDynamics, Inc., Royal I, LLC and RITA Medical Systems, Inc. (incorporated by reference to Annex E of the Company’s Registration Statement on Form S-4, filed with the Commission on December 8, 2006).
|
2.5
|
Amendment No. 2, dated January 16, 2007, to the Agreement and Plan of Merger, dated as of November 27, 2006, by and among AngioDynamics, Inc., Royal I, LLC and RITA Medical Systems, Inc. (incorporated by reference to Exhibit 2.1 of the Company’s current report on Form 8-K, filed with the Commission on January 16, 2007).
|
2.6
|
Asset Purchase Agreement, dated as of April 9, 2008, by and between Diomed Holdings, Inc. and Diomed, Inc., as sellers and AngioDynamics, Inc., as Buyer (We agree to furnish to the Commission, upon request, a copy of each exhibit to this Asset Purchase Agreement).
|
2.7
|
Sale of the Business and Assets of Diomed Limited (in administration), dated April 10, 2008, by and between AngioDynamics, Inc., Diomed Limited (in administration) and Steve Law (as administrator) (We agree to furnish to the Commission, upon request, a copy of each exhibit to this Stock Purchase Agreement).
|
2.8
|
Stock Purchase Agreement, dated as of January 30, 2012, by and among AngioDynamics, Inc., NM Holding Company, Inc. (“Navilyst”), the stockholders of Navilyst who are, or will be before the closing set forth on the signature pages thereto, solely with respect to, and as specified in, Sections 2.4 and 7.11(b) thereof, the Optionholders who execute joinder agreements thereto, and, solely with respect to, and as specified in, Section 2.6 and Article XII thereof, Avista Capital Partners GP, LLC, in its capacity as sellers’ representative (incorporated by reference to Exhibit 2.1 of the Company’s current report on Form 8-K filed with the Commission on February 3, 2012).
|
2.9
|
Stockholders Agreement, dated as of May 22, 2012, among AngioDynamics, Inc. and the stockholders set forth on the signature pages thereto (incorporated by reference to Exhibit 2.2 of the Company’s current report on Form 8-K filed with the Commission on May 25, 2012).
|
2.10
|
Stock Purchase Agreement, dated as of October 8, 2012, by and among AngioDynamics, Inc., Vortex Medical, Inc. (“Vortex”), the stockholders of Vortex set forth on the signature pages thereto, the optionholders of Vortex set forth on the signature pages thereto and CHTP Management Services, Inc., as sellers’ representative (incorporated by reference to Exhibit 2.1 of the Company’s current report on Form 8-K, filed with the Commission on October 12, 2012).
|
3.1.1
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s quarterly report on Form 10-Q, filed with the Commission on October 7, 2005).
|
3.1.2
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of AngioDynamics, Inc.
|
3.2
|
Amended and Restated By-laws (incorporated by reference to Exhibit 3.2 of the Company’s quarterly report on Form 10-Q, filed with the Commission on October 7, 2005).
|
4.1
|
Credit Agreement, dated as of September 19, 2013, by and among AngioDynamics, Inc., the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Keybank National Association as co-syndication agents, and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Keybank National Association as joint bookrunners and joint lead arrangers (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed with the Commission on September 24, 2013).
|
4.2
|
Except as set forth in Exhibit 4.4 above, the instruments defining the rights of holders of long-term debt securities of the Company and its subsidiaries have been omitted. We agree to furnish to the Commission, upon request, a copy of each instrument with respect to issuances of long term debt of the Company and its subsidiaries.
|
10.1.1
|
AngioDynamics, Inc. 1997 Stock Option Plan, as amended by the Board and Shareholders on February 27, 2004 (incorporated by reference to Exhibit 10.2 of the Company’s registration statement on Form S-1, filed on March 5, 2004).
|
10.1.2
|
AngioDynamics, Inc. 2004 Stock and Incentive Award Plan (as amended) (incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on September 17, 2014).
|
10.1.3
|
AngioDynamics 2013 Total Shareholder Return Performance Unit Agreement Program (incorporated by reference to Exhibit 10.2 of the Company's current report on Form 8-K filed with the Commission on November 5, 2013).
|
10.1.4
|
AngioDynamics 2014 Total Shareholder Return Performance Unit Agreement Program (incorporated by reference to Exhibit 10.1.4 of the Company's annual report on Form 10-K filed with the Commission on January 12, 2015).
|
10.1.5
|
AngioDynamics 2015 Total Shareholder Return Performance Unit Agreement Program.
|
10.2
|
AngioDynamics, Inc. Employee Stock Purchase Plan (as amended) (incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on September 17, 2014).
|
10.3.1
|
Form of Non-Statutory Stock Option Agreement pursuant to the AngioDynamics, Inc. Stock and Incentive Award Plan (incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q, filed with the Commission on October 12, 2004).
|
10.4.1
|
Form of 2013 Performance Share Award Agreement pursuant to the AngioDynamics, Inc. 2004 Stock and Incentive Award Plan (incorporated by reference to Exhibit 10.2 of the Company’s current report on Form 8-K, filed with the Commission on May 12, 2005).
|
10.4.2
|
Form of 2014 Performance Share Award Agreement pursuant to the AngioDynamics, Inc. 2004 Stock and Incentive Award Plan (incorporated by reference to Exhibit 10.4.2 of the Company's annual report on Form 10-K filed with the Commission on January 12, 2015).
|
10.4.3
|
Form of 2015 Performance Share Award Agreement pursuant to the AngioDynamics, Inc. 2004 Stock and Incentive Award Plan.
|
10.5.1
|
Form of Restricted Stock Award Agreement pursuant to the AngioDynamics, Inc. 2004 Stock and Incentive Award Plan (incorporated by reference to the Company’s current report on Form 8-K, filed with the Commission on May 12, 2005).
|
10.6
|
Rita Medical Systems, Inc. 1994 Incentive Stock Plan (incorporated by reference to Exhibit 10.2 of Rita Medical Systems registration statement on Form S-1, filed with the Commission on May 3, 2000)
|
10.7
|
Horizon Medical Products, Inc. 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.11 of Horizon Medical Products’ registration statement on Form S-1, filed with the Commission on February 13, 1998.
|
10.8
|
Rita Medical Systems, Inc. 2000 Stock Plan (incorporated by reference to Exhibit 10.3 of Rita Medical Systems registration statement on Form S-1/A, filed with the Commission on June 14, 2000).
|
10.9
|
Rita Medical Systems, Inc. 2000 Directors’ Stock Plan, as amended on June 8, 2005 (incorporated by reference to Exhibit 99.2 of Rita Medical System’s registration statement on Form S-8, filed with the Commission on July 8, 2005).
|
10.10
|
Rita Medical Systems, Inc. 2005 Stock and Incentive Plan (incorporated by reference to Exhibit 99.1 of Rita Medical System’s registration statement on Form S-8, filed with the Commission on July 8, 2005).
|
10.11
|
Form of Indemnification Agreement of AngioDynamics, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K, filed with the Commission on May 12, 2006).
|
10.12.1
|
Form of Severance Agreement of AngioDynamics, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s current report on form 8-K, filed with the Commission on October 31, 2007).
|
10.13
|
Form of Change in Control Agreement (incorporated by reference to Exhibit 10.13 of the Company's annual report on Form 10-K filed with the Commission on January 12, 2015).
|
10.14
|
Non-Statutory Stock Option Agreement, by and between AngioDynamics, Inc. and Jan Keltjens, dated January 19, 2009 (incorporated by reference to Exhibit 10.3 of the Company’s current report on Form 8-K, filed with the Commission on January 23, 2009).
|
10.15
|
Restricted Stock Agreement, by and between AngioDynamics, Inc. and Jan Keltjens, dated January 19, 2009 (incorporated by reference to Exhibit 10.4 of the Company’s current report on Form 8-K, filed with the Commission on January 23, 2009).
|
10.16
|
Non-Statutory Stock Option Agreement, by and between AngioDynamics, Inc. and Eamonn Hobbs, dated January 20, 2009 (incorporated by reference to Exhibit 10.7 of the Company’s current report on Form 8-K, filed with the Commission on January 23, 2009).
|
10.17
|
Employment Agreement, dated August 15, 2011, between AngioDynamics, Inc. and Joseph M. DeVivo (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K, filed with the Commission on August 16, 2011, 2011).
|
10.18
|
Change in Control Agreement, dated August 15, 2011, between AngioDynamics, Inc. and Joseph M. DeVivo (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K, filed with the Commission on August 16, 2011, 2011).
|
10.19
|
AngioDynamics, Inc. Fiscal Year 2012 Senior Executive Equity Incentive Program (incorporated by reference to Exhibit 10.30 of the Company’s annual report on Form 10-K, filed with the commission on August 12, 2011).
|
10.20
|
Separation and General Release, by and between AngioDynamics, Inc. and Jan Keltjens, dated June 13, 2011 (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K, filed with the Commission on June 14, 2011).
|
10.21
|
Retirement and Separation Agreement and General Release, dated November 19, 2012, between AngioDynamics, Inc. and D. Joseph Gersuk (incorporated by reference as Exhibit 10.1 of the Company’s current report on Form 8-K, filed with the Commission on November 21, 2012).
|
10.22
|
Change in Control Agreement, effective November 30, 2012, between AngioDynamics, Inc. and Mark T. Frost (incorporated by reference as Exhibit 10.2 of the Company’s current report on Form 8-K, filed with the Commission on November 21, 2012).
|
14
|
Code of Ethics (incorporated by reference to Exhibit 14 of the Company’s current report on Form 8-K, filed with the Commission on May 12, 2006).
|
21
|
Subsidiaries
|
23
|
Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm.
|
31.1
|
Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Schema Document
|
101.CAL
|
XBRL Calculation Linkbase Documents
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Labels Linkbase Documents
|
101.PRE
|
XBRL Presentation Linkbase Documents
|
III.
|
Performance Share Units
|
TSR Performance
Percentile Rank
|
Performance Share Units
as a Percent of Target
|
75th Percentile or above
|
200%
|
50th Percentile
|
100%
|
25th Percentile
|
50%
|
Below 25th Percentile
|
0%
|
IV.
|
Calculation of Total Shareholder Return and Definitions
|
V.
|
Calculation of Percentile Performance
|
|
|
VI.
|
Peer Group
|
|
|
VII.
|
Payment Eligibility Criteria
|
|
|
VIII.
|
Termination, Suspension or Modification and Interpretation of the Program
|
Abaxis Inc.
|
Lakeland Industries Inc.
|
Abiomed Inc.
|
Lemaitre Vascular, Inc.
|
Accuray Inc.
|
|
AlphaTec Holdings Inc.
|
Masimo Corporation
|
Articure, Inc.
|
Merit Medical Systems, Inc.
|
Atrion Corporation
|
Mine Safety Appliances Company
|
C.R. Bard, Inc.
|
Natus Medical Incorporated
|
Becton, Dickinson & Company
|
NuVasive, Inc.
|
Boston Scientific Corporation
|
NxStage Medical, Inc.
|
Cantel Medical Corp.
|
Resmed Inc.
|
Conmed Corporation
|
|
CryoLife, Inc.
|
RTI Surgical, Inc.
|
Cutera, Inc.
|
Solta Medical, Inc.
|
Cyberonics, Inc.
|
Span-America Medical Systems, Inc.
|
Cynosure, Inc.
|
Spectranetics Corporation
|
Dexcom, Inc.
|
St. Jude Medical, Inc.
|
Digirad Corp
|
Steris Corporation
|
Edwards Lifesciences Corporation
|
Stryker Corporation
|
Endologix, Inc.
|
|
Exactech, Inc.
|
Synergetics USA, Inc.
|
Haemonetics Corporation
|
Teleflex Incorporated
|
ICU Medical, Inc.
|
Thoratec Corporation
|
Insulet Corporation
|
Varian Medical Systems, Inc.
|
Integra Lifesciences Holdings Corporation
|
Vascular Solutions, Inc.
|
Intricon Corporation
|
|
Intuitive Surgical, Inc.
|
Wright Medical Group, Inc.
|
Invacare Corporation
|
Zimmer Holdings, Inc.
|
I.
|
Company Performance Levels
|
TSR Performance
Percentile Rank
|
Performance Share Units
as a Percent of Target
|
75th Percentile or above
|
200%
|
50th Percentile
|
100%
|
25th Percentile
|
50%
|
Below 25th Percentile
|
0%
|
II.
|
The Peer Group (as defined in the Program) with respect to this Agreement is set forth below.
|
Abaxis Inc.
|
Lakeland Industries Inc.
|
Abiomed Inc.
|
Lemaitre Vascular, Inc.
|
Accuray Inc.
|
|
AlphaTec Holdings Inc.
|
Masimo Corporation
|
|
|
Articure, Inc.
|
Merit Medical Systems, Inc.
|
Atrion Corporation
|
Mine Safety Appliances Company
|
C.R. Bard, Inc.
|
Natus Medical Incorporated
|
Becton, Dickinson & Company
|
NuVasive, Inc.
|
Boston Scientific Corporation
|
NxStage Medical, Inc.
|
Cantel Medical Corp.
|
Resmed Inc.
|
Conmed Corporation
|
|
CryoLife, Inc.
|
RTI Surgical, Inc.
|
Cutera, Inc.
|
Solta Medical, Inc.
|
Cyberonics, Inc.
|
Span-America Medical Systems, Inc.
|
Cynosure, Inc.
|
Spectranetics Corporation
|
Dexcom, Inc.
|
St. Jude Medical, Inc.
|
Digirad Corp
|
Steris Corporation
|
Edwards Lifesciences Corporation
|
Stryker Corporation
|
Endologix, Inc.
|
|
Exactech, Inc.
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Synergetics USA, Inc.
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Haemonetics Corporation
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Teleflex Incorporated
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ICU Medical, Inc.
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Thoratec Corporation
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Insulet Corporation
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Varian Medical Systems, Inc.
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Integra Lifesciences Holdings Corporation
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Vascular Solutions, Inc.
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Intricon Corporation
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Intuitive Surgical, Inc.
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Wright Medical Group, Inc.
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Invacare Corporation
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Zimmer Holdings, Inc.
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Subsidiary
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State of Incorporation or Organization
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Vortex Medical
|
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Delaware
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NM Holding Company, Inc.
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Delaware
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Navilyst Medical Holdings, Inc.
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Delaware
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Navilyst Medical, Inc.
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Delaware
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AngioDynamics UK Limited
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United Kingdom
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AngioDynamics Netherlands B. V.
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Netherlands
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RITA Medical Systems, LLC
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Delaware
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AngioDynamics Netherlands B. V.
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Netherlands
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Clinical Devices, B. V.
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Netherlands
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1.
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I have reviewed this annual report on Form 10-K of AngioDynamics, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/ S / J
OSEPH
M. D
EVIVO
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Joseph M. DeVivo, President,
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Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of AngioDynamics, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/ S / MARK T. FROST
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Mark T. Frost, Executive Vice President,
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Chief Financial Officer
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1.
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the annual report on Form 10-K of the Company for the fiscal year ended May 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Joseph M. DeVivo
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Joseph M. DeVivo, President,
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Chief Executive Officer
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1.
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the annual report on Form 10-K of the Company for the fiscal year ended May 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Mark T. Frost
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Mark T. Frost, Executive Vice President,
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Chief Financial Officer
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