Angiodynamics Inc (ANGO) Q4 2023 Earnings Call Transcript

Angiodynamics Inc (NASDAQ: ANGO) Q4 2023 earnings call dated Jul. 12, 2023

Corporate Participants:

Jim Clemmer — Chief Executive Officer

Steve Trowbridge — Chief Financial Officer

Analysts:

Jayson Bedford — Raymond James — Analyst

Bill Plovanic — Canaccord Genuity — Analyst

Matthew Mishan — KeyBanc Capital Markets — Analyst

Presentation:

Operator

Good morning, and welcome to the AngioDynamics Fourth Quarter and Fiscal Year 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference call is being recorded.

The news release detailing AngioDynamics’ fourth quarter and fiscal year 2023 results crossed the wire earlier this morning and is available on the company’s website. This conference call is also being broadcast live over the Internet at the Investors section of the company’s website at www.angiodynamics.com, and the webcast replay of the call will be available at the same site approximately one hour after the end of today’s call.

Before we begin, I would like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings and gross margins for fiscal year 2024 as well as trends that may continue.

Management encourages you to review the company’s past and future filings with the SEC, including without limitation the company’s Forms 10-Q and 10-K which identifies specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non-GAAP financial measures during the call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends and the company’s business over time. Investors should consider these non-GAAP measures, in addition to not as a substitute for or as superior to financial reporting measures prepared in accordance with GAAP. A slide package offering insight into the Company’s financial results is also available on the Investors section of the company’s website under Events and Presentations. This presentation should be read in conjunction with the press release discussing the company’s operating results and financial performance during this morning’s conference call.

I’d now like to turn the call over to Jim Clemmer, AngioDynamics’ President and Chief Executive Officer. Mr. Clemmer?

Jim Clemmer — Chief Executive Officer

Good morning, everyone, and thank you for joining us for AngioDynamics fourth quarter and fiscal 2023 earnings call. Joining me on today’s call is Steve Trowbridge, AngioDynamics’ Executive Vice-President and Chief Financial Officer, who will provide a detailed analysis of our fourth quarter and fiscal year financial performance and our fiscal 2024 guidance.

FY ’23 saw continued progress against our long-term strategy, and we have already had an exciting start to FY ’24, with the strategic divestiture that we announced on June 8, and are looking forward to delivering solid pro-forma revenue growth this year. We ended the fourth quarter with revenue of $91.1 million, representing growth of 4.7% year-over-year, led by growth of 17.2% from our Med Tech segment. For the full fiscal year, our revenue was $338.8 million, representing growth of 7.1% over the previous year. Our Med Tech segment grew 22.8% and our Med Device segment grew 1.9%. We are now 24 months into our 36-month plan, and we are progressing at or ahead of our long-term revenue targets that we provided in July of 2021.

We are very pleased with the results from our Auryon PAD business, as we finished the year with revenue of $41.1 million, which was an increase of 41% over FY 2022. We are continuing to gain share in this category based upon the science behind Auryon, which provides physicians with the power they seek and the safety they require when treating patients with peripheral artery disease. In less than three years since launch, Auryon is becoming a trusted tool, and many physicians are also sharing their positive experiences with Auryon.

In addition, we are excited about early findings published in the cardiovascular revascularization medicine outlining the ability of the Auryon laser to fracture medial arterial calcification in small vessels. We will continue to invest in this unique platform, and we have plans to launch a venous thrombectomy version of Auryon, as well as pursue a pathway to launch a coronary atherectomy version of Auryon in the future. These launches will exponentially increase the addressable markets in which Auryon competes. We also anticipate receiving CE Mark for Auryon in the first half of fiscal 2024.

Our NanoKnife business grew nearly 19% in FY ’23, and most importantly, sales of probes grew 27% over prior year, ahead of our goal. NanoKnife growth from our international team came as they established new relationships with partners who assist in supporting our procedures. And our U.S. growth was driven by continuing interest in this technology as more physicians become aware of our DIRECT and PRESERVE trials.

We are really excited to report that our PRESERVE trial studying the use of NanoKnife to treat intermediate-risk prostate cancer is now fully enrolled, and we are on track to finish our study and present our results to the FDA in calendar Q3 of 2024.

Additionally in July in the U.K., the National Institute for Health and Care Excellence, or NICE Interventional Procedures Committee finalized guidance for IRA in prostate, moving NanoKnife from research only to special arrangements. We believe this change in guidelines will help improve access for patients within the U.K., and represents another positive step towards our ultimate goal of having the NanoKnife system being recognized as a standard-of-care for patients with intermediate-risk prostate cancer.

NICE guidance is recognized as a leading authority in healthcare decision-making due to its rigorous evaluation process and evidence-based approach, and we are encouraged to know that many regulatory bodies around the world may consider NICE guidance when reviewing healthcare interventions for approvals or when making policy decisions. We believe that NanoKnife has the potential to be one of the most important breakthroughs for men who qualify for a focal treatment approach to their disease by driving beneficial outcomes and offering significant quality-of-life benefits. It also has the potential to open up a roughly $700 million market here in the U.S., and potentially a $2 billion market globally for those intermediate-risk patients.

In FY ’23, our international business grew an impressive 12% over prior year, and 14% on a constant-currency basis. Growth came both from our Med Tech and Med Device segments. It was also a very balanced throughout the geographies that we support. Our team is strong, and we will continue to grow in international markets through our strategy that employs key partners to support our products, continued exposure through our series of scientific symposiums and further expansion of our Med Tech portfolio, as we gain important regulatory approvals around the globe.

We believe this is the right approach, and it allows us to leverage our partners in both the Med Tech and Med Device segments without a significant investment that would be required to build out a fully direct global salesforce.

Our mechanical thrombectomy business which includes AngioVac and AlphaVac, finished the fiscal year with growth of 9.7% over prior year, which was below our expectations. We believe that we have great products that offer excellent clinical outcomes with strong patient safety profiles, and we will be launching enhancements to these products that incorporate feedback and insights from our customers and other interested physicians.

As we have previously discussed, we are in the early stages of developing our product portfolio in the thrombectomy space. Today our AlphaVac product offerings are utilized in the large bore subsection of the market and are subject devices for our APEX study. Looking ahead, we are preparing to launch a new version of our Auryon product for use in the lower extremities segment of the venous thrombectomy market. We believe that this will be a disruptive technology, giving customers an option to treat small-vessel clots using the power, energy and aspiration capabilities of Auryon which will be unlike anything else currently on the market. We are planning to launch this product in calendar year 2025.

On the clinical front, we are also pleased to report that our APEX study evaluating AlphaVac F18 as a treatment for pulmonary embolism is more than 50% enrolled, and we expect to complete enrollment this winter and submit our results to the FDA in the first half of calendar year 2024.

To achieve our expectations for our thrombectomy business, we are continuing to improve our customer messaging, our training, our field performance especially for AngioVac. As we discussed on last quarter’s call, we are taking steps to address each of these areas to ensure that this important business meets our expectations in the future. The thrombectomy opportunity is very important to our company, and we are confident that our unique designs and ultimately our comprehensive offering will enable us to drive significant profitable growth in this business for years to come, even with strong competition in the market

Our Med Device segment grew 1.9% over prior year, in line with the expectations that we set during our Investor and Technology Day in July of 2021. This important segment will continue to provide a stable cash generation and earnings profile as it does not require the same level of annual investment as our Med Tech platforms require.

On June 8, we announced the divestiture of our Dialysis and BioSentry businesses to Merit Medical. These businesses were divested for two reasons, first it will allow us to focus on fewer product categories and allocate our resources to areas that are better aligned with our long-term portfolio objectives. And second, we were able to strengthen our balance sheet, and today we are in a strong net cash position with no need to utilize outside sources to fund our investments in the future.

We have always said that we would be active portfolio managers, and this move shows that when value generating opportunities arise, to better align our portfolio with our long-term strategic goals, we’ll execute upon them.

And finally, on June 1, 2023, in our ongoing IP lawsuit with CR Bard, the United States District Court in Delaware granted our motion for a judgment as a matter of law, declaring that the patents asserted by Bard are invalid as anticipated, indefinite and ineligible and not infringed. The decision is consistent with our position and our arguments in the case since it was brought in 2015. We expect this decision to be appealed by Bard, but we believe that it is supported by the facts and reflects our meritorious defenses and positions in the other case is pending with Bard in Delaware and Utah. While the case may not be definitively over yet, we believe that the judge’s ruling is accurate and gets us one step closer to finally putting this matter to rest.

Before I turn the call over to Steve, I’d like to thank our team here at AngioDynamics for their commitment to executing upon our strategy of becoming a high-growth profitable Med Tech company. We are excited about last month’s divestiture announcement and the fact that we are now in a net cash position with a simpler, more well-defined portfolio.

With that, let me turn the call over to Steve Trowbridge. Steve?

Steve Trowbridge — Chief Financial Officer

Thanks, Jim. Good morning, everyone. Before I begin, I’d like to direct everyone to the presentation on our Investor Relations website, summarizing the key items from our quarterly and fiscal year results. Our revenue for the fourth quarter of FY ’23 increased 4.7% year-over-year to $91.1 million, driven by continued strength in our Med Tech platforms including Auryon, NanoKnife and thrombectomy. We are pleased with the growth year-over-year, particularly in light of the fact that we had a very strong Q4 last year as our capacity improvement initiatives significantly reduced the existing back order at that time. Last year’s Q4 exhibited growth of 13.2% over the prior year, so our results for Q4 of FY ’23 illustrate continued strong execution against our strategic plan.

Med Tech revenue was $26.5 million, a 17.2% year-over-year increase, while Med Device revenue was $64.6 million, growing 0.3% compared to the fourth quarter of FY ’22. For the full year 2023, our Med Tech platform grew 22.8% and our Med Device businesses grew 1.9% compared to the prior year period. Through the first two years of our three-year plan, our Med Tech segment has grown at a CAGR of 33.1%.

For the fourth fiscal quarter, our Med Tech platforms comprised 29% of our total revenue. For the full year 2023, our Med Tech platforms comprised 29% of our total revenue compared to 25% for fiscal 2022.

Our Auryon platform contributed $11.8 million in revenue during the fourth quarter, growing 22% compared to last year. As Jim mentioned, we are very pleased with the trajectory of this business and are developing additional indications in the VTE space, as well as international opportunities in atherectomy that we think will open up additional significant addressable markets.

Mechanical thrombectomy revenue which includes AngioVac and AlphaVac sales increased 3.7% over the fourth quarter of FY ’22. AlphaVac revenue for the fourth quarter was $1.8 million. Both the F22 and F18 versions of AlphaVac are performing well and receiving positive physician feedback. For the full year 2023, revenue for AlphaVac was $7.2 million.

AngioVac revenue was $6.1 million in the quarter, representing a decline of 8.3% over the prior year, but up sequentially from the third quarter. As Jim mentioned, AngioVac saw ongoing challenges during the year, and we’ve taken meaningful action to address these challenges and are committed to executing against them in ’24. For the full year 2023, AngioVac revenue was $24.5 million, a decline of 8.2%.

We remain confident that mechanical thrombectomy will be a significant contributor to our growth strategy, and we will continue to prioritize investments in this platform, including the new product introductions that Jim mentioned, as well as our clinical initiatives such as the APEX PE study.

NanoKnife disposable revenue during the quarter increased 28% year-over-year. For the full-year 2023, sales of NanoKnife disposables grew 27.1%. We continue to see this business perform very well both in our U.S. and in international markets, and we’re pleased to announce that enrollment in PRESERVE is now 100% complete

In the fourth quarter, our Med Device segment grew 0.3% year-over-year, led by strength in our angiography products and the dialysis business. As of the end of the fourth quarter, our backlog stood at $2.7 million. For the full year 2023, our Med Device segment grew 1.9%, in line with our long-term target of 1% to 3% growth.

Moving down the income statement, our gross margin for the fourth quarter of FY ’23 was 50.9%, a decrease of 250 basis-points compared to the year-ago period. For the full year ’23, gross margin was 51.4%, a decrease of 100 basis-points compared to fiscal year 2022.

For the fourth quarter, Med Tech gross margin was 64.7%, a decrease of 400 basis-points, and Med Device gross margin was 45.2%, a decrease of 280 basis-points each when compared to the fourth quarter of last year. For the full year, Med Tech gross margins were 64.1%, a decrease of 270 basis-points and Med Device margins were 46.4%, a decrease of 120 basis-points, again each when compared to the full-year ’22.

As we’ve discussed, our strategic business model contemplates gross margin expansion as our higher-margin Med Tech segment continues to become a larger portion of our overall revenue base. And we have seen this dynamic, however, the overall impact has been mitigated by the supply-chain disruptions and inflationary pressures that we’ve experienced over the past two years.

When looking specifically at the Med Tech segment, gross margins remained significantly ahead of overall corporate margins. The quarterly and year-over-year performance was negatively impacted by the revenue performance of AngioVac and increased capital placements.

The pay-down of the IIA royalty that we discussed in Q1 provided approximately a $1 million benefit over the course of the year, partially offsetting these headwinds. Med Device margins were positively impacted by increased productivity, but this benefit was more than offset by the continued inflationary environment, the hurdle created by the CARES Act benefit in FY ’22 and the mix-shift resulting from increased international growth.

Turning to R&D, our research and development expenses during the fourth quarter of FY ’23 was $7.9 million or 8.6% of sales compared to $7.9 million or 9% of sales a year ago. Our disciplined investment in R&D will continue to drive growth across our key technology platforms, and includes the clinical and product development spend for our Med Tech portfolio.

R&D expense for the full-year 2023 was $29.9 million or 8.8% of sales compared to $30.7 million or 9.7% of sales in the previous year. For FY ’24, we anticipate R&D spend to target 9% to 11% of sales. When accounting for the divestiture of our Dialysis and BioSentry businesses that was completed in June of this year, R&D spend in FY ’23 on a pro-forma basis was 9.6% of sales.

SG&A expense for the fourth quarter of FY ’23 was $36.5 million, representing 40.1% of sales compared to $37.9 million or 43.6% of sales a year ago. For the full-year 2023, SG&A expense was $144.3 million, representing 42.6% of sales compared to $133.8 million, representing 42.3% of sales in FY ’22. For FY ’24, we anticipate SG&A spend to target 45% to 48% of revenue. When accounting for the divestiture, SG&A spend in FY ’23 on a pro-forma basis was 47.1% of sales.

As we stated at the time of the divestiture, it was not a significant amount of direct costs that were associated with the Dialysis and BioSentry businesses. As a result, our expectations for SG&A spend in FY ’24 do include leverage with respect to G&A spending, but also include an increase as a percent of sales in sales and marketing.

Our adjusted net income for the fourth quarter of FY ’23 was $0.7 million or adjusted earnings per share of $0.02 compared to an adjusted net income of $0.3 million, or adjusted earnings per share of $0.01 in the fourth quarter of last year.

For the full-year 2023, adjusted net loss was $2.4 million or adjusted loss per share of $0.06 compared to an adjusted net loss of $0.2 million or approximately breakeven on a per share basis a year ago. As a reminder, our adjusted earnings per share in FY ’22 included a $4.2 million or $0.08 per share benefit related to the reimbursement of certain expenses under the employee retention credit as part of the CARES Act, with no corresponding benefit in our FY ’23 numbers.

GAAP net income as-reported in our earnings release this morning included a goodwill impairment related to our Med Device segment in connection with the divestiture of our Dialysis and BioSentry businesses. These businesses that were divested on June 8, 2023, subsequent to our fiscal year end were accounted for as held-for-sale as of May 31st 2023. So as a result, we reported a goodwill impairment during the fiscal fourth quarter ended May 31, 2023. The impairment resulted in a loss of $14.5 million or $0.37 per share on a GAAP basis.

Due to the timing of the transaction, the loss is recorded in our fourth fiscal quarter for FY ’23, but the offsetting gain on the sale of the assets will be recorded until our first fiscal quarter of FY ’24. Result is a large GAAP loss in the fourth quarter of ’23, but then it will be a larger GAAP gain in the first quarter of FY ’24.

Adjusted EBITDA in the fourth quarter of FY ’23 was $7.9 million compared to $6.2 million in the fourth quarter of FY ’22. For the full-year ’23, adjusted EBITDA was $22.6 million compared to $20.9 million in FY ’22, representing year-over-year growth of over 8.3%.

In the fourth quarter of fiscal ’23, we generated $16 million in operating cash, had capital expenditures of $1.1 million and additions to Auryon placement and evaluation units of 0.5 million. At May 31st, 2023, which is prior to the divestiture, we had $44.6 million in cash and cash equivalents, compared to $30.1 million in cash and cash equivalents at February 28, 2023. We had $25 million outstanding under our revolving credit facility and $25 million outstanding under our delayed draw term loan at May 31st, 2023, equal to the amounts outstanding under these facilities at February 28th.

Subsequent to quarter-end, we use part of the proceeds from the divestiture to extinguish our debt. As a result, we currently have significant cash balances and zero debt. As is always the case, we expect our first fiscal quarter to have the highest utilization of cash during the fiscal year with cash balances building throughout the remainder of the fiscal year. So we expect to finish fiscal year 2024 with cash balances in the range of $65 million to $70 million, and we expect to be approaching cash-flow positive by the end of FY ’25, having utilized an aggregate of $10 million to $20 million over the two year period.

Said another way, immediately after the transaction when accounting for tax and deal costs, we had $90 million of cash. In June, we paid the $10 million Auryon earn-out, and expect to pay the next $5 million Auryon earn-out by the end of our fiscal ’24, with a final $5 million payment expected to occur in FY ’25. So that $15 million of ’24 milestone payments bring that $90 plus million down to $75 million in FY ’24. We expect to end our fiscal year ’24 with cash balances of $65 million to $70 million reflecting operating cash usage of $5 million to $10 million for the year.

Again, given the timing of Q1 payments and managing our working capital, Q1 will exhibit cash utilization with balances than growing throughout the year. We believe that we have more than sufficient cash to execute on our strategic initiatives, as we move to generating positive cash flow toward the end of our FY ’25.

In 2019, we began a transformation of AngioDynamics. The first step of the transformation was to fundamentally change our portfolio to incorporate platform technologies that can provide a unique advantage and compete in higher-growth, high-margin, large total addressable markets. We began the transformation by selling our largest business at the time, our NAMIC Fluid Management Business. And then investing a third of the proceeds from that sale to buy Eximo Medical, and early-stage Israeli startup, which led to the Auryon PAD laser.

We have continued our strategic transformation reporting our business in two segments, Med Tech and Med Device, using internal R&D to launch our AlphaVac mechanical thrombectomy device, and by investing in clinical initiatives to expand into specific uses, including our APEX study for PE and our PRESERVE study for the use of NanoKnife to treat intermediate-risk prostate cancer patients. In July of 2021, we articulated a goal of executing to a three-year CAGR for our Med Tech segment of 30% to 35%. Through two years of that three-year plan, our Med Tech segment has a CAGR of 33%.

We’ve indicated that we would be active portfolio managers with the goal of focusing our company on our strategic objectives. In June of this year, we completed the divestiture of our Dialysis and BioSentry businesses which recapitalized our balance sheet and enhanced our Med Tech focus.

Gross margin expansion has proved challenging. Coming out of the COVID global pandemic, we’ve been impacted by the tight labor market, which has not fully rebounded. In addition, our Med Device businesses contain a wide and very product offering that leaves us under scale, and it makes us susceptible to inflationary pressures limiting our ability to drive efficiencies.

The next phase of our transformation is to address the scale and structural limitations of our operating footprint in a capital-efficient manner, and we look forward to continuing to update you on our plans and actions to drive margin enhancements in the short and medium term.

Turning now to guidance. We anticipate that FY ’24 revenue will be in the range of $328 million to $333 million, and we expect full-year adjusted loss per share to be in the range of $0.28 to $0.34. As a reminder, this compares to fiscal year ’23 pro-forma revenue of $306.3 million and pro-forma loss per share of $0.43, when excluding the recently divested assets.

Those divested assets carry very little direct cost, which means while the transaction provided significant cash proceeds, it is dilutive to both corporate margins and a larger clip to the earnings line.

We expect FY ’24 gross margin to be in the range of 50% to 52% compared to pro-forma FY ’23 gross margin of 50.5%. For FY ’24, we expect Med Tech revenue growth in the range of 20% to 25% and Med Device revenue growth in the range of 1% to 3%. We expect Med Tech gross margins in the range of 63% to 65% and Med Device gross margins in the range of 43% to 45%.

With that, I’ll turn it back to Jim.

Jim Clemmer — Chief Executive Officer

Thanks, Steve. Our FY ’23 and the subsequent divestiture have positioned us to continue investing and growing the business in FY ’24, while also managing our cost structure, and looking to expand the margin profile of our business. We’re excited with where we are today, while also looking forward to introducing new products and new indications to the market and opening up additional addressable markets for our existing products.

Our team did a commendable job in FY ’23, shown true dedication to our strategy, and I’m very proud of what they’ve accomplished in the transformation of AngioDynamics so far. When we sold NAMIC in 2019, we told you that we are going to be a different company, one, driven by innovation, science and data generation. Since then, we have taken the necessary steps and have made the necessary investments to set AngioDynamics up to win. This doesn’t take place overnight, and is part of the organizational journey when becoming a science-based company.

The most successful companies in Med Tech got to where they are by delivering innovation to the customer and to the patient. We are committed to that process, delivering innovation and to challenging the current standards of care. We believe that our portfolio will do just that over the next five years, fueled by our investments in R&D, clinical expansion and sales and marketing resources. These investments and the important research that is being done today are the fuel that will power us to significantly expand our presence in large addressable markets and generate profitable growth for years to come.

With that, operator, I’d like to turn the call back and take questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] And our first question comes from the line of Jayson Bedford from Raymond James. Please proceed with your questions.

Jayson Bedford — Raymond James — Analyst

Good morning, can you hear me okay guys?

Jim Clemmer — Chief Executive Officer

Hi, Jason. Good morning, yup.

Jayson Bedford — Raymond James — Analyst

Good morning. Okay, so just on the EPS guide, perhaps surprising to a few folks, but it seems pretty consistent with your disclosures around profitability of the divested business. I think part of the problem is, you haven’t really tackled the pseudo fixed costs tied to the divested business. So, my question is when do you start pulling out some of the cost and kind of rightsizing the cost structure for $30 some-odd million less in revenue.

Steve Trowbridge — Chief Financial Officer

Yes, it’s a good question, Jayson. As we had indicated when we first announced the divestiture, there weren’t a lot of direct costs that come with this business, but we are gonna be tackling those costs, and so the guide partially reflects the fact that right off the bat, we’re going to continue to run our business, and then over-time look to right-size it as we get some operating experience. So, I do expect you’re going to see some of those costs come out, but you’re also going to see us continue to grow into the structure that we have. So, I think it’s going to be a little bit of a timing process but also, we did make that choice to monetize those assets and recapitalize the balance sheet, and we made that tradeoff a little bit for operating profit during the year.

Jayson Bedford — Raymond James — Analyst

Okay, and just as it relates to the deal, should we expect more divestitures in fiscal ’24?

Jim Clemmer — Chief Executive Officer

Hi, Jason, it’s Jim. As we’ve said before, we’ve tried to let our investors see our focus strategically towards our Med Tech platform, and it still comprises only about 30% of our company’s revenue. So, we want to continue to focus there. We have a lot of moving parts here, so it’s easier to operate the company with less moving parts, easier to focus our investments going forward. And some of those things are challenges, Jayson, during COVID, with supply-chain challenges when you have this many products and categories that you serve. So, we will watch and see. We have mentioned we will be active portfolio managers, and we’ll make sure that we can do the right things to keep our strategic goals in line, yet still back to what Steve said, making sure that our growth comes with a profitability that investors would be pleased to see. May take a little bit of time to get there. We’ve tried to outline that to you guys, but we’ll be active in our portfolio management.

Jayson Bedford — Raymond James — Analyst

Okay and just on the cash, obviously, the cash position has flipped here. You’re burning a little bit of cash, not a ton, but can you just walk through your plans for capital allocation? What are you going to do with the cash?

Steve Trowbridge — Chief Financial Officer

Yeah, it’s good question. I think our current projection is to take a little bit of time — six months, eight months, 10 months, and keep the cash. We want to be able to illustrate externally that we can manage the business in accordance with the guidance that we gave today. We want to show you that we’re not burning a significant amount of cash. And then as we exit that timeframe and we’re getting back to the cash-flow positive, at that time we will be a little bit more clear in terms of indications at that time of the use of the cash. As of right now, we don’t have any expectations of going out and doing divestitures or spending that cash. We’re going to continue to keep that cash and then illustrate our operating model before we move into uses of that cash.

Jayson Bedford — Raymond James — Analyst

Okay, and I’ll just ask one more and then jump back in queue. On thrombectomy, you mentioned that you’ll be launching enhancements — product enhancements. Can you just walk through the timing on those enhancements?

Jim Clemmer — Chief Executive Officer

Yeah, Jayson, It’s Jim. Just some of the feedback we have received now that AngioVac has been on the market for just over a year, we’ve got some great feedback on how it works, the safety and efficacy that it gives to the physicians, but you always get good feedback. So, we’re looking at making some product enhancements as anybody would do, a 2.0 version, adding some things. We expect some of those enhancements to be launched in calendar 2025. I’m sorry, just in calendar 2024 [Indecipherable] our fiscal year, next calendar year.

Jayson Bedford — Raymond James — Analyst

Okay, thank you.

Jim Clemmer — Chief Executive Officer

Thanks, Jayson.

Operator

Our next question is coming from the line of Bill Plovanic with Canaccord Genuity. Please proceed with your question.

Bill Plovanic — Canaccord Genuity — Analyst

Great, thanks for taking my questions. Good morning. First, just the Auryon product, the uses seemed to be expanding as you talk about the thrombectomy, and then going into coronary. Just, I’m trying to get wrap my head around. One is, we look at the business today that was really solid growth, how much of that was U.S. or U.S. driven? How much of that is outpatient versus OBL? And then just two, how should we think about this strategically as you move forward? It seems like this product is becoming a bigger and bigger piece of the company’s overall Med Tech franchise and finding more users.

Jim Clemmer — Chief Executive Officer

Yeah, so, Bill, good question. So first of all, almost every dollar of revenue that we added in 2023 was in the U.S. So, we’re gaining our CE Mark, as we speak. We said we expect that in the first half of this fiscal year. There were some research that was done in Europe and some of that was been published, we’ve talked about it by some clinicians and physicians in Europe. We’re really excited by Auryon. We look forward to seeing what they’re doing, but almost all of that was U.S. based.

And second, we’re running now at a clip, I’d call it 75% OBL revenue and 25% hospital revenue that’s increasing, the hospital percentage is increasing as we speak, which we would expect. As you know, we launched in September of 2020 during the pandemic, it was harder to get access in the hospitals at the time. So, our initial customers were OBL related, but we are watching that mix balance a bit more towards the hospitals.

And finally, Bill, your question is a great one. When we acquired Eximo Medical we believed in what it could do in this market, in the PAD market, and challenging the four good companies that we compete with. These guys are good companies with good products, but we knew what Auryon did was special and to create a spot in the market, we’re proving that. We also knew how it works, the mechanism-of-action and the science behind it could be applicable in other parts of the anatomy and other disease states, and that’s why we now have a lot of confidence in.

So, we’re talking about launching the venous version in FY — sorry, in calendar year 2025 is important to us, as we will round out our thrombectomy portfolio with Auryon in the small-vessel platform, and also, Bill, we really believe, as well as it works in peripheral artery disease, well, we can do the same thing in coronary giving doctors the safety they require treating coronary indications, and also the power of how Auryon delivers the energy within that vessel wall to break up calcium and clots. So that will be part of our future as you identified.

Bill Plovanic — Canaccord Genuity — Analyst

And then given the — moving into these new indications, are there major studies that we should be tracking? How do we think about that? And then just on the AlphaVac, that seems obviously to be going a little slower than our original expectations. And, you know, how is that until we get the F18 for PE? You’re going to be kind of hindsight [Phonetic] mind you’re back on that one in terms of growth, how should we think about that until the PE indication comes.

Jim Clemmer — Chief Executive Officer

Yes, it is a good question. As far as the Auryon version for thrombectomy, that’s a 510(k) process, so there won’t be a lot of studies required to get through the 510(k) process, it is built into our development and launch models that we have. And second, if we do a coronary model, there is a pathway that exist today as we would expect a study there, more of a PMA process. So, we will highlight and gave you guys more guidance as we get closer. It would be more complicated, but there is a pathway that will follow that the FDA kind of has it in place today.

And the second, back to — you mentioned about AlphaVac, we actually achieved the revenue we gave as guidance last year, seven to nine, I think is what we talked about. So, within that range, but it’s true we really learned a lot during the course of the year. Talked about enhancements we will make from some customer feedback, but overall, the product is really safe and effective. People are getting very confident when they use it at how well it works. We also think the [Indecipherable] APEX study will open up that large PE market for us, and today, we’re in that study phase, more than half enrolled, which is great, but we really want to unlock that, finish the study, unlocked that PE market. So, until then, we’ll do you would expect us to do. We’ll tread lightly, educate physicians on our product. There are spots they can use it within the anatomy today to remove clot, and that’s what we will work on, as well as finishing the study. When that study comes out, Bill, it opens up a large market for us, we think we’ll see large growth from there.

Bill Plovanic — Canaccord Genuity — Analyst

Okay and last question, I promise, just on PRESERVE studies enrolled, just give us timelines for data, submission, approval? I assume this is a 510(k), I believe. How should we think about that? And then how do you expect the impact on the business? How should we think about the timing for that? The data that would be inseminated into the marketplace and potentially drive that business. Thanks for taking my questions today.

Jim Clemmer — Chief Executive Officer

Bill, good questions. So, we’re excited that we have completely enrolled the study. The study has a 12-month follow-up, so we would expect us over the course of the year until next July, complete the follow up, compile the data and we will submit to the FDA not long after that. And we expect really if the process goes well to receive an indication by end of calendar year ’24. We hope along the way, we can publish some data and make it public. During that process, we think it would be compelling, it’s based upon other data that, you know, it’s been published around the globe by physicians who have utilized this unique device to treat these intermediate-risk prostate cancer patients. We believe the data is going to be compelling, not only because it reduces the effect of the tumor, but we also give the quality-of-life benefits back to those patients that they would risk with other procedures.

So, we’re excited, Bill. We’re going to again just continue what we’re doing today, support our customers, but we would expect when we receive that indication, you’ll see a different selling and marketing and clinical support approach from our company to maximize the opportunity in this market, that will really kick in more in calendar year ’25, after that indication has received.

Bill Plovanic — Canaccord Genuity — Analyst

Thanks for taking my question.

Jim Clemmer — Chief Executive Officer

Thank you.

Operator

The next question is from the line of Matthew Mishan with KeyBanc Capital Markets. Please proceed with your question.

Matthew Mishan — KeyBanc Capital Markets — Analyst

Thanks, good morning. Thanks for taking the questions. Hey, Jim, Steve, it seems like you’re taking a little bit of a different approach to guidance this year, especially around some of the individual moving pieces, but could you help us build up to that 20% to 25% Med Tech guidance for FY ’24? What’s above, what’s below, and how you are accounting for AngioVac and that?

Steve Trowbridge — Chief Financial Officer

Yeah, it’s a good question, Matt. So, we are — in the past couple of years as we were really just getting to the point of first reporting our business in the two reportable seconds, Med Tech and Med Device, and with some brand-new product launches, we did feel that it was important to give you guys a little bit more granularity. You’ve been able to see the progression and the trajectory of our businesses. So, when you think about building up to that Med Tech guide of 20%, 25% growth, you’ve seen the trajectory from Auryon, we talked about continuing to be pleased with what we’re seeing with Auryon and continued opportunities to take share, as well as increase utilization within our installed-base. So, you can think of Auryon on that same trajectory.

Again, with NanoKnife, you’ve seen more than 20% plus growth in probes as we continue to execute on our trials and continue to see really strong growth in the U.S. as well as international markets. Very, very similar trajectory with NanoKnife. To your question around thrombectomy, this is the second year of launch for AlphaVac, that’s a growth product for us. We’re going to continue to see some good growth in AlphaVac. We did clearly take into account when we were building our models, what we saw last year with AngioVac. We are still excited about AngioVac, it still has a growth opportunity for us. But as we talked about in Q3, we were kind of turning the ship from what we saw was the Valley for AngioVac. You saw Q4 be sequentially up, so clearly, we think we’ve turned that trend, but we’ve taken that into account, and as we’ve given you guys the guidance and thought about building up our models in Med Tech.

Matthew Mishan — KeyBanc Capital Markets — Analyst

Okay, that’s helpful. And is the way to think about the mechanical thrombectomy platform, that you’ll hopefully execute with the FDA and get an indication for pulmonary embolism at some point towards the end of this fiscal year, middle of next year, and at the same time, given it does seem like it’s a 510(k) process, you potentially could launch in that same year a DVT product with Auryon. Is that the right way to think about a year out, like FY ’25 as pipeline?

Jim Clemmer — Chief Executive Officer

Yeah, Matt, your timeline is pretty good. So, we agree with you, you just said about APEX PE, completing that study and maybe getting an indication. We gave a rough range, there is still lot of regulatory work to do, but your timeline is aligned with ours, so assume, call it, a year from now, we think we’d have that APEX PE indication, and then about a year after that, we talk today, I mentioned during calendar year ’25, how many Auryon version for venous thrombectomy being launched. So, we really have — the next 24 months will be exciting in that spot, having the PE indication for APEX that’s important, having some design enhancement developments added during the next calendar year, and then the Auryon version coming out in calendar ’25, we’re really excited over these next 24 months of how we will be significant player in that market with a really neat portfolio.

Matthew Mishan — KeyBanc Capital Markets — Analyst

And then on the Auryon international opportunity, I’m just curious, is the model is going to be different there where there may be capital purchases of the equipment, or is it still the same commercial model where you take that on your balance sheet, and it’s really just disposable volume?

Jim Clemmer — Chief Executive Officer

Yeah, great question, thanks for asking. We’re seeing a different approach map. We didn’t have the amount of kind of history built by the other player in the market who were to utilize the approach already providing capital to market, that was more prevalent in the U.S. So, we are already seeing a different approach towards the European market. We will give you more details as we get into the market, but I think the model you’re talking about, capital being done differently is what we expect as well. So won’t require as much significant investment from us to bring new customers online.

Matthew Mishan — KeyBanc Capital Markets — Analyst

Okay, outstanding. Thank you.

Jim Clemmer — Chief Executive Officer

Thank you, Matt.

Operator

Thank you. At this time, we’ve reached the end of the question-and-answer session. I will turn the call over to Jim Clemmer for closing remarks.

Jim Clemmer — Chief Executive Officer

Thank you, operator, and thanks again to the team at AngioDynamics. Hopefully, the investors are seeing our commitment to our transformation, as we going to become a growth company that does provide profitability to the bottom-line for years to come, based and founded by innovation and the quality of our products. Thank you for joining us today. We’ll speak again soon.

Operator

[Operator Closing Remarks]