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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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
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NASDAQ Global Select Market
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Preferred Stock Purchase Rights
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NASDAQ Global Select Market
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Large accelerated filer
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¨
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Accelerated filer
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x
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|||
Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Class
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Outstanding as of October 3, 2016
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Common Stock, par value $.01
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|
36,884,124
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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||
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Item 1.
|
||
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Item 1A.
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||
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Item 2.
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||
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Item 3.
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||
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Item 4.
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Item 5.
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||
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Item 6.
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Three Months Ended
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||||||
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Aug 31, 2016
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|
Aug 31, 2015
|
||||
Net sales
|
|
$
|
88,098
|
|
|
$
|
83,753
|
|
Cost of sales (exclusive of intangible amortization)
|
|
43,066
|
|
|
40,382
|
|
||
Gross profit
|
|
45,032
|
|
|
43,371
|
|
||
Operating expenses
|
|
|
|
|
||||
Research and development
|
|
6,709
|
|
|
6,129
|
|
||
Sales and marketing
|
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19,488
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|
|
21,200
|
|
||
General and administrative
|
|
8,168
|
|
|
7,914
|
|
||
Amortization of intangibles
|
|
4,235
|
|
|
4,415
|
|
||
Change in fair value of contingent consideration
|
|
443
|
|
|
355
|
|
||
Acquisition, restructuring and other items, net
|
|
2,417
|
|
|
2,143
|
|
||
Medical device excise tax
|
|
—
|
|
|
1,003
|
|
||
Total operating expenses
|
|
41,460
|
|
|
43,159
|
|
||
Operating income (loss)
|
|
3,572
|
|
|
212
|
|
||
Other (expenses) income
|
|
|
|
|
||||
Interest expense
|
|
(723
|
)
|
|
(800
|
)
|
||
Interest income
|
|
4
|
|
|
1
|
|
||
Other income (expense)
|
|
50
|
|
|
(118
|
)
|
||
Total other expenses, net
|
|
(669
|
)
|
|
(917
|
)
|
||
Income (loss) before income tax expense (benefit)
|
|
2,903
|
|
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(705
|
)
|
||
Income tax expense
|
|
1,603
|
|
|
70
|
|
||
Net income (loss)
|
|
$
|
1,300
|
|
|
$
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(775
|
)
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Income (loss) per share
|
|
|
|
|
||||
Basic
|
|
$
|
0.04
|
|
|
$
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(0.02
|
)
|
Diluted
|
|
$
|
0.04
|
|
|
$
|
(0.02
|
)
|
Basic weighted average shares outstanding
|
|
36,319
|
|
|
35,960
|
|
||
Diluted weighted average shares outstanding
|
|
36,698
|
|
|
35,960
|
|
|
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Three Months Ended
|
||||||
|
|
Aug 31, 2016
|
|
Aug 31, 2015
|
||||
Net Income (loss)
|
|
$
|
1,300
|
|
|
$
|
(775
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
||||
Unrealized gain on interest rate swap
|
|
—
|
|
|
66
|
|
||
Unrealized gain (loss) on marketable securities
|
|
(6
|
)
|
|
3
|
|
||
Foreign currency translation (loss)
|
|
(294
|
)
|
|
(90
|
)
|
||
Other comprehensive (loss), before tax
|
|
(300
|
)
|
|
(21
|
)
|
||
Income tax (expense) benefit related to items of other comprehensive income
|
|
2
|
|
|
(26
|
)
|
||
Other comprehensive (loss), net of tax
|
|
(298
|
)
|
|
(47
|
)
|
||
Total comprehensive income (loss), net of tax
|
|
$
|
1,002
|
|
|
$
|
(822
|
)
|
|
Three Months Ended
|
||||||
|
Aug 31, 2016
|
|
Aug 31, 2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
1,300
|
|
|
$
|
(775
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
6,153
|
|
|
7,113
|
|
||
Stock based compensation
|
1,684
|
|
|
1,626
|
|
||
Change in fair value of contingent consideration
|
443
|
|
|
355
|
|
||
Deferred income taxes
|
1,565
|
|
|
(208
|
)
|
||
Fixed and intangible asset impairments and disposals
|
45
|
|
|
220
|
|
||
Change in accounts receivable allowances
|
(197
|
)
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|
109
|
|
||
Other
|
18
|
|
|
(13
|
)
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
2,822
|
|
|
5,925
|
|
||
Inventories
|
(3,049
|
)
|
|
(6,922
|
)
|
||
Prepaid expenses and other assets
|
(869
|
)
|
|
(2,605
|
)
|
||
Accounts payable, accrued and other liabilities
|
(2,475
|
)
|
|
(126
|
)
|
||
Net cash provided by operating activities
|
7,440
|
|
|
4,699
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(481
|
)
|
|
(743
|
)
|
||
Net cash used in investing activities
|
(481
|
)
|
|
(743
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayment of long-term debt
|
(2,500
|
)
|
|
(1,250
|
)
|
||
Payment of contingent consideration previously established in purchase accounting
|
(2,100
|
)
|
|
(2,100
|
)
|
||
Proceeds from exercise of stock options and employee stock purchase plan
|
2,803
|
|
|
1,279
|
|
||
Net cash (used in) financing activities
|
(1,797
|
)
|
|
(2,071
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(84
|
)
|
|
(8
|
)
|
||
Increase in cash and cash equivalents
|
5,078
|
|
|
1,877
|
|
||
Cash and cash equivalents at beginning of period
|
32,333
|
|
|
18,391
|
|
||
Cash and cash equivalents at end of period
|
$
|
37,411
|
|
|
$
|
20,268
|
|
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Contractual obligations for acquisition of intangibles and business
|
$
|
—
|
|
|
$
|
—
|
|
Contractual obligations for acquisition of fixed assets
|
$
|
52
|
|
|
$
|
111
|
|
|
Common Stock
|
|
Additional
paid in
capital
|
|
Accumulated deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Treasury Stock
|
|
|
||||||||||||||||||
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Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
Total
|
||||||||||||||||||
Balance at May 31, 2016
|
36,420,403
|
|
|
$
|
363
|
|
|
$
|
525,775
|
|
|
$
|
(16,015
|
)
|
|
$
|
(791
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
507,228
|
|
Net income (loss)
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
1,300
|
|
||||||||||||
Exercise of stock options
|
221,528
|
|
|
1
|
|
|
2,530
|
|
|
|
|
|
|
|
|
|
|
2,531
|
|
||||||||||
Purchase of common stock under ESPP
|
78,647
|
|
|
1
|
|
|
728
|
|
|
|
|
|
|
|
|
|
|
729
|
|
||||||||||
Issuance of performance share units, net
|
23,405
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Issuance of restricted stock units, net
|
137,783
|
|
|
1
|
|
|
(458
|
)
|
|
|
|
|
|
|
|
|
|
(457
|
)
|
||||||||||
Stock based compensation
|
|
|
|
|
1,684
|
|
|
|
|
|
|
|
|
|
|
1,684
|
|
||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(298
|
)
|
|
|
|
|
|
(298
|
)
|
||||||||||||
Balance at August 31, 2016
|
36,881,766
|
|
|
$
|
366
|
|
|
$
|
530,259
|
|
|
$
|
(14,715
|
)
|
|
$
|
(1,089
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
512,717
|
|
|
Aug 31, 2016
|
|
May 31, 2016
|
||||
|
(in thousands)
|
||||||
Raw materials
|
$
|
22,584
|
|
|
$
|
21,669
|
|
Work in process
|
11,528
|
|
|
10,700
|
|
||
Finished goods
|
24,162
|
|
|
23,001
|
|
||
Inventories
|
$
|
58,274
|
|
|
$
|
55,370
|
|
|
August 31, 2016
|
||||||||||||
|
Gross
carrying
value
|
|
Accumulated
amortization
|
|
Net carrying
value
|
|
Weighted
avg useful
life
|
||||||
(in thousands)
|
|
|
(years)
|
||||||||||
Product technologies
|
$
|
148,378
|
|
|
$
|
(53,553
|
)
|
|
$
|
94,825
|
|
|
10.2
|
Customer relationships
|
88,389
|
|
|
(48,153
|
)
|
|
40,236
|
|
|
11.9
|
|||
Trademarks
|
28,470
|
|
|
(6,976
|
)
|
|
21,494
|
|
|
10.7
|
|||
In process R&D acquired
|
3,600
|
|
|
—
|
|
|
3,600
|
|
|
Indefinite
|
|||
Licenses
|
5,037
|
|
|
(4,009
|
)
|
|
1,028
|
|
|
9.1
|
|||
Distributor relationships
|
2,150
|
|
|
(991
|
)
|
|
1,159
|
|
|
5.2
|
|||
|
$
|
276,024
|
|
|
$
|
(113,682
|
)
|
|
$
|
162,342
|
|
|
|
|
May 31, 2016
|
||||||||||||
|
Gross
carrying
value
|
|
Accumulated
amortization
|
|
Net carrying
value
|
|
Weighted
avg useful
life
|
||||||
(in thousands)
|
|
|
(years)
|
||||||||||
Product technologies
|
$
|
148,387
|
|
|
$
|
(51,313
|
)
|
|
$
|
97,074
|
|
|
10.2
|
Customer relationships
|
88,389
|
|
|
(47,133
|
)
|
|
41,256
|
|
|
11.9
|
|||
Trademarks
|
28,470
|
|
|
(6,242
|
)
|
|
22,228
|
|
|
10.7
|
|||
In process R&D acquired
|
3,600
|
|
|
—
|
|
|
3,600
|
|
|
Indefinite
|
|||
Licenses
|
7,931
|
|
|
(6,716
|
)
|
|
1,215
|
|
|
7.6
|
|||
Distributor relationships
|
2,150
|
|
|
(946
|
)
|
|
1,204
|
|
|
5.2
|
|||
|
$
|
278,927
|
|
|
$
|
(112,350
|
)
|
|
$
|
166,577
|
|
|
|
|
Aug 31, 2016
|
|
May 31, 2016
|
||||
|
(in thousands)
|
||||||
Payroll and related expenses
(1)
|
$
|
6,618
|
|
|
$
|
9,414
|
|
Royalties
|
2,345
|
|
|
2,489
|
|
||
Accrued severance
|
1,388
|
|
|
1,524
|
|
||
Sales and franchise taxes
(2)
|
2,106
|
|
|
565
|
|
||
Outside services
(3)
|
1,172
|
|
|
2,063
|
|
||
Other
|
5,585
|
|
|
5,841
|
|
||
|
$
|
19,214
|
|
|
$
|
21,896
|
|
|
Three Months Ended
|
||||||
|
Aug 31, 2016
|
|
Aug 31, 2015
|
||||
Income (loss) before Income Taxes
|
$
|
2,903
|
|
|
$
|
(705
|
)
|
Less discrete book income (expense):
|
|
|
|
||||
Non-taxable portion of change in fair value of contingent consideration
|
—
|
|
|
170
|
|
||
Ordinary income (loss) before income taxes
|
2,903
|
|
|
(875
|
)
|
||
|
|
|
|
||||
Income tax expense (benefit) based on ordinary income (loss) at estimated tax rates
|
$
|
1,603
|
|
|
$
|
(376
|
)
|
Discrete tax expense (benefit):
|
|
|
|
||||
Adjustment for elimination of the ASC 718 APIC pool
|
—
|
|
|
471
|
|
||
Adjustments to prior period tax liabilities
|
—
|
|
|
(25
|
)
|
||
Total income tax expense
|
$
|
1,603
|
|
|
$
|
70
|
|
|
Three Months Ended
|
||||
|
Aug 31, 2016
|
|
Aug 31, 2015
|
||
Basic
|
36,319
|
|
|
35,960
|
|
Effect of dilutive securities
|
379
|
|
|
—
|
|
Diluted
|
36,698
|
|
|
35,960
|
|
|
|
|
|
||
Securities excluded as their inclusion would be anti-dilutive
|
1,503
|
|
|
3,241
|
|
|
Three Months Ended
|
||||||
|
Aug 31, 2016
|
|
Aug 31, 2015
|
||||
Net sales
|
|
|
|
||||
Peripheral Vascular
|
$
|
51,409
|
|
|
$
|
47,106
|
|
Vascular Access
|
25,005
|
|
|
24,645
|
|
||
Oncology/Surgery
|
11,064
|
|
|
11,334
|
|
||
Supply Agreement
|
620
|
|
|
668
|
|
||
Total
|
$
|
88,098
|
|
|
$
|
83,753
|
|
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 consideration 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 discount rate, amount and timing of future interest and principal payments and forward projections. Assumptions associated with the auction rate securities include 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.
|
|
Fair Value Measurements using
inputs considered as:
|
|
Fair Value at August 31, 2016
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
|
|
|
|
|
|
|
||||||||
U.S. government agency obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,647
|
|
|
$
|
1,647
|
|
Total
|
—
|
|
|
—
|
|
|
1,647
|
|
|
1,647
|
|
||||
Total Financial Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,647
|
|
|
$
|
1,647
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent liability for acquisition earn out
|
—
|
|
|
—
|
|
|
36,618
|
|
|
36,618
|
|
||||
Total Financial Liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,618
|
|
|
$
|
36,618
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurements using
inputs considered as:
|
|
Fair Value at May 31,
2016
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
|
|
|
|
|
|
|
||||||||
U.S. government agency obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,653
|
|
|
$
|
1,653
|
|
Total
|
—
|
|
|
—
|
|
|
1,653
|
|
|
1,653
|
|
||||
Total Financial Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,653
|
|
|
$
|
1,653
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent liability for acquisition earn out
|
—
|
|
|
—
|
|
|
38,275
|
|
|
38,275
|
|
||||
Total Financial Liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,275
|
|
|
$
|
38,275
|
|
|
Financial Assets
|
|
Financial Liabilities
|
||||
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
||||
|
|
|
|
|
|||
Balance, May 31, 2016
|
$
|
1,653
|
|
|
$
|
38,275
|
|
Total gains or losses (realized/unrealized):
|
|
|
|
|
|
||
Change in present value of contingent consideration (1)
|
—
|
|
|
443
|
|
||
Included in other comprehensive income (loss)
|
(6
|
)
|
|
—
|
|
||
Contingent consideration payments
|
—
|
|
|
(2,100
|
)
|
||
Balance, August 31, 2016
|
$
|
1,647
|
|
|
$
|
36,618
|
|
|
Fair value at
|
|
Valuation
|
|
|
|
|
||
|
Aug 31, 2016
|
|
Technique
|
|
Unobservable Input
|
|
Range
|
||
Revenue based payments
|
$
|
33,555
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
4%
|
|
|
|
|
|
Probability of achieving sales
|
|
75-100%
|
||
|
|
|
|
|
Projected fiscal year of payment
|
|
2017 - 2023
|
||
Milestone based payments
|
3,063
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
16%
|
|
|
|
|
|
|
Probability of achieving milestone
|
|
75-100%
|
||
|
|
|
|
|
Projected fiscal year of payment
|
|
2017
|
||
Total
|
$
|
36,618
|
|
|
|
|
|
|
|
As of August 31, 2016
|
Amortized
cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. government agency obligations
|
$
|
1,800
|
|
|
$
|
—
|
|
|
$
|
(153
|
)
|
|
$
|
1,647
|
|
|
$
|
1,800
|
|
|
$
|
—
|
|
|
$
|
(153
|
)
|
|
$
|
1,647
|
|
As of May 31, 2016
|
Amortized
cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
U.S. government agency obligations
|
$
|
1,800
|
|
|
$
|
—
|
|
|
$
|
(147
|
)
|
|
$
|
1,653
|
|
|
$
|
1,800
|
|
|
$
|
—
|
|
|
$
|
(147
|
)
|
|
$
|
1,653
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Three months ended
|
||||||||||||
|
Aug 31, 2016
|
|
Aug 31, 2015
|
|
% Growth
|
|
Currency Impact (Pos) Neg
|
|
Constant Currency
|
||||
Net Sales by Product Category
|
|
|
|
|
|
|
|
|
|
||||
Peripheral Vascular
|
$
|
51,409
|
|
|
$
|
47,106
|
|
|
9%
|
|
|
|
|
Vascular Access
|
25,005
|
|
|
24,645
|
|
|
1%
|
|
|
|
|
||
Oncology/Surgery
|
11,064
|
|
|
11,334
|
|
|
-2%
|
|
|
|
|
||
Total Excluding Supply Agreement
|
87,478
|
|
|
83,085
|
|
|
5%
|
|
0%
|
|
5%
|
||
Supply Agreement
|
620
|
|
|
668
|
|
|
-7%
|
|
0%
|
|
-7%
|
||
Total
|
$
|
88,098
|
|
|
$
|
83,753
|
|
|
5%
|
|
0%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
||||
Net Sales by Geography
|
|
|
|
|
|
|
|
|
|
||||
United States
|
$
|
71,753
|
|
|
$
|
68,369
|
|
|
5%
|
|
0%
|
|
5%
|
International
|
15,725
|
|
|
14,716
|
|
|
7%
|
|
1%
|
|
8%
|
||
Supply Agreement
|
620
|
|
|
668
|
|
|
-7%
|
|
0%
|
|
-7%
|
||
Total
|
$
|
88,098
|
|
|
$
|
83,753
|
|
|
5%
|
|
0%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|||||||||
|
|
Aug 31, 2016
|
|
Aug 31, 2015
|
|
% Change
|
|||||
Gross profit
|
|
$
|
45.0
|
|
|
$
|
43.4
|
|
|
4
|
%
|
Gross profit % of sales
|
|
51.1
|
%
|
|
51.8
|
%
|
|
|
|||
Research and development
|
|
$
|
6.7
|
|
|
$
|
6.1
|
|
|
10
|
%
|
% of sales
|
|
7.6
|
%
|
|
7.3
|
%
|
|
|
|||
Selling and marketing
|
|
$
|
19.5
|
|
|
$
|
21.2
|
|
|
-8
|
%
|
% of sales
|
|
22.1
|
%
|
|
25.3
|
%
|
|
|
|||
General and administrative
|
|
$
|
8.2
|
|
|
$
|
7.9
|
|
|
4
|
%
|
% of sales
|
|
9.3
|
%
|
|
9.4
|
%
|
|
|
|||
Medical device excise tax
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
-100
|
%
|
% of sales
|
|
—
|
%
|
|
1.2
|
%
|
|
|
|
|
Three months ended
|
||||||||||
|
|
Aug 31, 2016
|
|
Aug 31, 2015
|
|
$ Change
|
||||||
Amortization of intangibles
|
|
$
|
4.2
|
|
|
$
|
4.4
|
|
|
$
|
(0.2
|
)
|
Change in fair value of contingent consideration
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
Acquisition, restructuring and other items, net
|
|
$
|
2.4
|
|
|
$
|
2.1
|
|
|
$
|
0.3
|
|
Other expense
|
|
$
|
(0.7
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
0.2
|
|
|
|
Three months ended
|
||||||
|
|
Aug 31, 2016
|
|
Aug 31, 2015
|
||||
Income tax expense (benefit)
|
|
$
|
1.6
|
|
|
$
|
0.1
|
|
Effective tax rate including discrete items
|
|
55.2
|
%
|
|
(9.9
|
)%
|
|
Three Months Ended
|
||||||
|
Aug 31, 2016
|
|
Aug 31, 2015
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
7,440
|
|
|
$
|
4,699
|
|
Investing activities
|
(481
|
)
|
|
(743
|
)
|
||
Financing activities
|
(1,797
|
)
|
|
(2,071
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(84
|
)
|
|
(8
|
)
|
||
Net change in cash and cash equivalents
|
$
|
5,078
|
|
|
$
|
1,877
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
|
Issuer Purchases of Equity Securities
|
|||||||||||
Period
|
Total
Number of
Shares
Purchased
(1)
|
|
Average
Price Paid
per Share
|
|
Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Programs
|
|
Maximum
Approximate
Dollar Value
of Shares
that May Yet
Be
Purchased
Under Plans
or Programs
|
|||||
June 1 - June 30, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
July 1 - July 31, 2016
|
9,063
|
|
|
$
|
15.73
|
|
|
—
|
|
|
—
|
|
August 1 - August 31, 2016
|
7,092
|
|
|
$
|
16.02
|
|
|
—
|
|
|
—
|
|
Total
|
16,155
|
|
|
$
|
15.85
|
|
|
—
|
|
|
—
|
|
(1)
|
The Company repurchased 16,155 shares during the three months ended
August 31, 2016
from employees to satisfy tax withholding requirements on the vesting of restricted shares from equity-based awards.
|
Item 3.
|
Defaults on Senior Securities.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits.
|
|
|
|
|
ANGIODYNAMICS, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
||
Date:
|
|
October 5, 2016
|
|
/ S / JAMES C. CLEMMER
|
|
|
|
|
James C. Clemmer, President,
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
||
Date:
|
|
October 5, 2016
|
|
/ S / MICHAEL C. GREINER
|
|
|
|
|
Michael C. Greiner, Executive Vice President,
Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
|
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.
|
Integra Lifesciences Holdings Corporation
|
Abiomed Inc.
|
Intricon Corporation
|
Accuray Inc.
|
Intuitive Surgical, Inc.
|
AlphaTec Holdings Inc.
|
Invacare Corporation
|
Articure, Inc.
|
Lakeland Industries Inc.
|
Atrion Corporation
|
Lemaitre Vascular, Inc.
|
C.R. Bard, Inc.
|
Masimo Corporation
|
Becton, Dickinson & Company
|
Merit Medical Systems, Inc.
|
Boston Scientific Corporation
|
Mine Safety Appliances Company
|
Cantel Medical Corp.
|
Natus Medical Incorporated
|
Conmed Corporation
|
NuVasive, Inc.
|
CryoLife, Inc.
|
NxStage Medical, Inc.
|
Cutera, Inc.
|
Resmed Inc.
|
Cynosure, Inc.
|
RTI Surgical, Inc.
|
Dexcom, Inc.
|
Span-America Medical Systems, Inc.
|
Digirad Corp
|
Spectranetics Corporation
|
Edwards Lifesciences Corporation
|
St. Jude Medical, Inc.
|
Endologix, Inc.
|
Steris Corporation
|
Exactech, Inc.
|
Stryker Corporation
|
Haemonetics Corporation
|
Teleflex Incorporated
|
ICU Medical, Inc.
|
Varian Medical Systems, Inc.
|
Insulet Corporation
|
Vascular Solutions, 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.
|
Integra Lifesciences Holdings Corporation
|
Abiomed Inc.
|
Intricon Corporation
|
Accuray Inc.
|
Intuitive Surgical, Inc.
|
AlphaTec Holdings Inc.
|
Invacare Corporation
|
Articure, Inc.
|
Lakeland Industries Inc.
|
Atrion Corporation
|
Lemaitre Vascular, Inc.
|
C.R. Bard, Inc.
|
Masimo Corporation
|
Becton, Dickinson & Company
|
Merit Medical Systems, Inc.
|
Boston Scientific Corporation
|
Mine Safety Appliances Company
|
Cantel Medical Corp.
|
Natus Medical Incorporated
|
Conmed Corporation
|
NuVasive, Inc.
|
CryoLife, Inc.
|
NxStage Medical, Inc.
|
Cutera, Inc.
|
Resmed Inc.
|
Cynosure, Inc.
|
RTI Surgical, Inc.
|
Dexcom, Inc.
|
Span-America Medical Systems, Inc.
|
Digirad Corp
|
Spectranetics Corporation
|
Edwards Lifesciences Corporation
|
St. Jude Medical, Inc.
|
Endologix, Inc.
|
Steris Corporation
|
Exactech, Inc.
|
Stryker Corporation
|
Haemonetics Corporation
|
Teleflex Incorporated
|
ICU Medical, Inc.
|
Varian Medical Systems, Inc.
|
Insulet Corporation
|
Vascular Solutions, Inc.
|
|
|
|
|
|
|
1.
|
Terms used in this Agreement
:
|
a.
|
AngioDynamics
means AngioDynamics, Inc., its successors or assigns, and any of their existing and future divisions, subsidiaries, and affiliates.
|
b.
|
Confidential Information
means all trade secrets, proprietary information, know-how, and confidential information disclosed to Executive or known by Executive as a result of Executive’s employment by AngioDynamics, not generally known in the trade or industry in which AngioDynamics is engaged, about AngioDynamics’ business operations, customers, suppliers, products, processes, machines, systems, and services, including research, development, manufacturing, purchasing, finance, data processing, engineering, marketing, designs, concepts, know-how, merchandising, and selling, and corresponding information about the products, processes, machines, and services of AngioDynamics, acquired by Executive during Executive’s employment by AngioDynamics. The fact that information is not patentable or copyrightable shall not affect its status as Confidential Information.
|
c.
|
Conflicting Product
means any product, process, machine, or service of any person or organization other than AngioDynamics, whether now existing or hereafter developed: (a) which is identical to, substantially the same as, an adequate substitute for, resembles, or competes with a product, process, machine, system, or service upon or with which Executive worked during Executive’s term of employment with AngioDynamics or about which Executive acquired Confidential Information; or (b) whose use or marketability could be enhanced by application to it of Confidential Information to which Executive had access during Executive’s employment with AngioDynamics; or (c) which is (or could reasonably be anticipated to be) marketed or distributed in such a manner and in such a geographic area as to actually compete with such a product, process, machine, or service of AngioDynamics.
|
d.
|
Conflicting Organization
means any person or organization, which is now or hereafter engaged directly or indirectly in research on or the acquisition, development, production, distribution, marketing, providing, or selling of a Conflicting Product.
|
e.
|
Terms not defined herein shall have the meaning ascribed to such terms in the Severance Agreement.
|
2.
|
Non-Competition
.
|
a.
|
For a period of: twenty four (24) months after termination of Executive’s employment with AngioDynamics pursuant to the Severance Agreement, Executive will not render services, directly or indirectly, to any Conflicting Organization.
|
b.
|
The restrictions set forth in Section 2(a) apply in the United States and in any foreign country or foreign territory where AngioDynamics produces, sells, or markets its goods and services.
|
3.
|
Non-Solicitation
.
|
a.
|
Business Relations
. Executive agrees that for a period of twenty four (24) months after the termination of Executive’s employment with AngioDynamics pursuant to the Severance Agreement, Executive will not solicit, induce, attempt to induce, appropriate, direct, or assist another to appropriate or direct, or provide any services to any current customer, supplier, licensee, or other business relation (defined as any customer, supplier, licensee, or other business relation of AngioDynamics with whom Executive had dealings and/or for whom Executive performed services at any time during the last two (2) years of Executive’s employment with AngioDynamics) to cease doing business with AngioDynamics (including, without limitation, making any negative statements or communications concerning AngioDynamics or any of its directors, officers, or employees).
|
b.
|
Employees
. Executive agrees that for a period of twenty four (24) months after the termination of Executive’s employment with AngioDynamics pursuant to the Severance Agreement, Executive will not solicit, interfere with, encourage, endeavor, or engage in discussions with any employee or independent contractor of AngioDynamics for the purpose of (or with a view toward) having such employee or independent contractor leave the employment (or independent contractor assignment) of AngioDynamics for any reason, including leaving to render services to any Conflicting Organization.
|
4.
|
Miscellaneous.
|
a.
|
This Agreement shall be binding upon Executive, and upon Executive’s spouse, heirs, executors, assigns and administrators and shall inure to the benefit of AngioDynamics, its successors, and assigns.
|
b.
|
Any dispute arising under or in connection with this Agreement or related to any matter which is the subject of this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts located in New York, and this Agreement shall be construed under and according to the laws of the State of New York, without regard to its conflict of laws rules.
|
c.
|
The parties acknowledge that any breach or threatened breach of this Agreement by Executive will cause AngioDynamics material and irreparable injury and monetary damages may not be an adequate remedy for such injury. In the event of a breach or threatened breach of this Agreement, AngioDynamics may pursue any remedies at law or equity available to it, including injunctive relief. Notwithstanding anything contained in this Agreement to the contrary, in addition to any remedies available to AngioDynamics (and not in exclusion of any such remedies) in the event of a breach of this Agreement, the Executive shall be required to remit to AngioDynamics any severance payments paid to Executive by AngioDynamics pursuant to this Agreement
|
d.
|
If any provision of this Agreement is held by any court of competent jurisdiction to be illegal, overly broad, invalid, or otherwise unenforceable in duration, geographical coverage, substantive scope, or otherwise, then this Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable provision, and the rest of the Agreement, valid and enforceable. If a court declines to amend this Agreement as provided herein, the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the remaining provisions, which shall be enforced as if the offending provision had not been included in this Agreement.
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e.
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Nothing herein shall obligate AngioDynamics to continue to retain Executive in AngioDynamics’ employment or limit or impair AngioDynamics’ ability to terminate Executive’s employment at will, with or without cause for any reason. Executive is an employee at will.
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f.
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In the event of a violation of this Agreement, the time limitations set forth in this Agreement shall be extended for a period of time equal to the period of time during which such breach occurs, and, in the event AngioDynamics is required to seek relief from such breach before any court, board, or other tribunal, then the time limitation shall be extended for a period of time equal to the pendency of such proceedings, including all appeals.
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g.
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For twenty four (24) months following the termination of Executive’s employment with AngioDynamics pursuant to the Severance Agreement, Executive agrees to show this Agreement to any prospective employer before Executive directly or indirectly owns, manages, operates, controls, becomes employed by, becomes a shareholder of, becomes a director of, becomes an officer of, participates in, contracts with or becomes connected in any capacity or in any manner with such person or entity during any restrictive period provided in this Agreement. Executive also agrees to inform AngioDynamics at the time Executive gives notice of separation from employment, of the identity of Executive’s new employer and Executive’s new job title and responsibilities.
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h.
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Executive ACKNOWLEDGES HAVING READ, EXECUTED, AND RECEIVED A COPY OF THIS AGREEMENT, UNDERSTANDS HIS/HER OBLIGATIONS UNDER THIS AGREEMENT, SIGNS IT VOLUNTARILY, INTENDS TO BE LEGALLY BOUND BY THIS AGREEMENT, AND AGREES THAT WITH RESPECT TO THE SUBJECT MATTER HEREOF IT IS EXECUTIVE’S ENTIRE AGREEMENT WITH ANGIODYNAMICS AND SUPERSEDES ANY PREVIOUS ORAL OR WRITTEN COMMUNICATIONS, REPRESENTATIONS, UNDERSTANDINGS, OR AGREEMENTS WITH ANGIODYNAMICS OR ANY OF ITS OFFICIALS OR REPRESENTATIVES.
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1.
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I have reviewed this quarterly report on Form 10-Q 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 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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(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)
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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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1.
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I have reviewed this quarterly report on Form 10-Q 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 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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(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)
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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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1.
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the quarterly report on Form 10-Q of the Company for the fiscal quarter ended August 31, 2016 (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 / James C. Clemmer
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James C. Clemmer, President,
Chief Executive Officer
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1.
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the quarterly report on Form 10-Q of the Company for the fiscal quarter ended August 31, 2016 (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 / Michael C. Greiner
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Michael C. Greiner, Executive Vice President and
Chief Financial Officer
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