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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28,November 30, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to                 
Commission file number 0-50761

AngioDynamics, Inc.
(Exact name of registrant as specified in its charter)
ango-20211130_g1.gif
 

Delaware11-3146460
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

14 Plaza Drive, Latham, New York 12110
(Address of principal executive offices and zip code)
(518) 795-1400
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common stock, par value $.01ANGONASDAQ Global Select Market
Preferred Stock Purchase RightsNASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)

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(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  ☐    No  ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐  Accelerated filer ☒
Non-accelerated filer ☐Smaller reporting company ☐
Emerging growth company☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
Indicate the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding as of March 29, 2021January 6, 2022
Common Stock, par value $.01 38,137,36738,716,740



Table of Contents
AngioDynamics, Inc. and Subsidiaries
TABLE OF CONTENTS
Page
Part I: Financial Information
Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II: Other Information
Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.

AngioDynamics, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands of dollars, except per share data)

Three Months EndedNine Months Ended
Feb 28, 2021Feb 29, 2020Feb 28, 2021Feb 29, 2020
Net sales$71,182 $69,780 $214,168 $205,825 
Cost of sales (exclusive of intangible amortization)32,652 29,481 99,700 85,765 
Gross profit38,530 40,299 114,468 120,060 
Operating expenses:
Research and development8,565 8,395 27,286 22,450 
Sales and marketing19,607 20,934 57,486 60,427 
General and administrative9,011 10,203 26,787 29,651 
Amortization of intangibles4,292 5,019 13,838 13,417 
Change in fair value of contingent consideration183 419 (290)116 
Acquisition, restructuring and other items, net610 1,565 3,057 4,486 
Total operating expenses42,268 46,535 128,164 130,547 
Operating loss(3,738)(6,236)(13,696)(10,487)
Other income (expense):
Interest expense, net(226)(166)(676)(672)
Other income (expense), net(163)(131)259 (67)
Total other expense, net(389)(297)(417)(739)
Loss before income tax benefit(4,127)(6,533)(14,113)(11,226)
Income tax benefit(583)(824)(2,033)(1,506)
Net loss$(3,544)$(5,709)$(12,080)$(9,720)
Loss per share
Basic$(0.09)$(0.15)$(0.32)$(0.26)
Diluted$(0.09)$(0.15)$(0.32)$(0.26)
Weighted average shares outstanding
Basic38,360 37,999 38,281 37,924 
Diluted38,360 37,999 38,281 37,924 
Three Months EndedSix Months Ended
Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Net sales$78,280 $72,770 $155,251 $142,986 
Cost of sales (exclusive of intangible amortization)37,725 32,596 74,557 67,048 
Gross profit40,555 40,174 80,694 75,938 
Operating expenses:
Research and development8,199 9,712 15,593 18,721 
Sales and marketing23,606 20,174 48,052 37,879 
General and administrative9,678 9,219 18,621 17,776 
Amortization of intangibles4,889 4,593 9,710 9,546 
Change in fair value of contingent consideration609 184 804 (473)
Acquisition, restructuring and other items, net2,253 1,128 4,693 2,447 
Total operating expenses49,234 45,010 97,473 85,896 
Operating loss(8,679)(4,836)(16,779)(9,958)
Other income (expense):
Interest expense, net(174)(235)(330)(450)
Other income (expense), net(10)(102)(362)422 
Total other expense, net(184)(337)(692)(28)
Loss before income tax benefit(8,863)(5,173)(17,471)(9,986)
Income tax benefit(512)(905)(2,148)(1,450)
Net loss$(8,351)$(4,268)$(15,323)$(8,536)
Loss per share
Basic$(0.21)$(0.11)$(0.39)$(0.22)
Diluted$(0.21)$(0.11)$(0.39)$(0.22)
Weighted average shares outstanding
Basic39,053 38,327 38,893 38,242 
Diluted39,053 38,327 38,893 38,242 
The accompanying notes are an integral part of these consolidated financial statements.
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AngioDynamics, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(in thousands of dollars)
Three Months EndedNine Months Ended
Feb 28, 2021Feb 29, 2020Feb 28, 2021Feb 29, 2020
Net loss$(3,544)$(5,709)$(12,080)$(9,720)
Other comprehensive income (loss), before tax:
Foreign currency translation12 8 3,287 88 
Other comprehensive income, before tax12 8 3,287 88 
Income tax expense related to items of other comprehensive income (loss)0 0 0 0 
Other comprehensive income, net of tax12 8 3,287 88 
Total comprehensive loss, net of tax$(3,532)$(5,701)$(8,793)$(9,632)
Three Months EndedSix Months Ended
Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Net loss$(8,351)$(4,268)$(15,323)$(8,536)
Other comprehensive income, before tax:
Foreign currency translation819 1,180 1,409 3,275 
Other comprehensive income, before tax819 1,180 1,409 3,275 
Income tax expense related to items of other comprehensive income (loss)— — — — 
Other comprehensive income, net of tax819 1,180 1,409 3,275 
Total comprehensive loss, net of tax$(7,532)$(3,088)$(13,914)$(5,261)
The accompanying notes are an integral part of these consolidated financial statements.

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AngioDynamics, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands of dollars, except share data)
Feb 28, 2021May 31, 2020
Assets
Current assets
Cash and cash equivalents$54,469 $54,435 
Accounts receivable, net of allowances of $1,820 and $2,150 respectively33,171 31,263 
Inventories49,006 59,905 
Prepaid expenses and other9,011 7,310 
Total current assets145,657 152,913 
Property, plant and equipment, net29,827 28,312 
Other assets19,443 15,338 
Intangible assets, net186,216 197,136 
Goodwill201,102 200,515 
Total assets$582,245 $594,214 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$17,067 $19,096 
Accrued liabilities30,760 29,380 
Current portion of contingent consideration0 836 
Other current liabilities2,429 2,133 
Total current liabilities50,256 51,445 
Long-term debt, net of current portion30,000 40,000 
Deferred income taxes22,371 24,057 
Contingent consideration, net of current portion15,362 14,811 
Other long-term liabilities9,320 9,029 
Total liabilities127,309 139,342 
Commitments and contingencies (Note 14)00
Stockholders' equity
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized; 0 shares issued and outstanding0 0 
Common stock, par value $0.01 per share, 75,000,000 shares authorized; 38,877,367 and 38,448,536 shares issued and 38,507,367 and 38,078,536 shares outstanding at February 28, 2021 and May 31, 2020, respectively377 374 
Additional paid-in capital570,725 561,871 
Accumulated deficit(112,398)(100,318)
Treasury stock, 370,000 shares at February 28, 2021 and May 31, 2020, respectively(5,714)(5,714)
Accumulated other comprehensive income (loss)1,946 (1,341)
Total Stockholders’ Equity454,936 454,872 
Total Liabilities and Stockholders' Equity$582,245 $594,214 
Nov 30, 2021May 31, 2021
Assets
Current assets
Cash and cash equivalents$34,291 $48,161 
Accounts receivable, net of allowances of $1,850 and $1,919 respectively38,205 35,405 
Inventories48,183 48,614 
Prepaid expenses and other11,506 8,699 
Total current assets132,185 140,879 
Property, plant and equipment, net43,090 37,073 
Intangible assets, net165,000 168,977 
Goodwill201,709 201,316 
Other assets12,119 13,193 
Total assets$554,103 $561,438 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$24,191 $19,630 
Accrued liabilities27,715 35,459 
Other current liabilities2,569 2,495 
Total current liabilities54,475 57,584 
Long-term debt25,000 20,000 
Deferred income taxes17,994 19,955 
Contingent consideration16,540 15,741 
Other long-term liabilities7,726 8,701 
Total liabilities121,735 121,981 
Commitments and contingencies (Note 14)00
Stockholders' equity
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized; no shares issued and outstanding— — 
Common stock, par value $0.01 per share, 75,000,000 shares authorized; 39,455,193 and 38,920,951 shares issued and 39,085,193 and 38,550,951 shares outstanding at November 30, 2021 and May 31, 2021, respectively379 377 
Additional paid-in capital580,330 573,507 
Accumulated deficit(147,189)(131,866)
Treasury stock, 370,000 shares at November 30, 2021 and May 31, 2021, respectively(5,714)(5,714)
Accumulated other comprehensive income4,562 3,153 
Total Stockholders’ Equity432,368 439,457 
Total Liabilities and Stockholders' Equity$554,103 $561,438 
The accompanying notes are an integral part of these consolidated financial statements.
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AngioDynamics, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands of dollars)
Nine Months Ended
Feb 28, 2021Feb 29, 2020
Cash flows from operating activities:
Net loss$(12,080)$(9,720)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization19,392 17,550 
Non-cash lease expense1,860 1,567 
Stock based compensation6,398 5,998 
Change in fair value of contingent consideration(290)116 
Deferred income taxes(2,187)(1,606)
Change in accounts receivable allowances31 186 
Fixed and intangible asset impairments and disposals190 395 
              Write-off of other assets0 593 
Other(149)70 
Changes in operating assets and liabilities:
Accounts receivable(1,823)7,834 
Inventories11,119 (14,036)
Prepaid expenses and other(8,821)(9,378)
Accounts payable, accrued and other liabilities(1,746)(18,003)
Net cash provided by (used in) operating activities11,894 (18,434)
Cash flows from investing activities:
Additions to property, plant and equipment(4,567)(5,756)
Acquisition of intangibles0 (350)
Cash paid for acquisitions0 (55,760)
Net cash used in investing activities(4,567)(61,866)
Cash flows from financing activities:
Proceeds from borrowings on long-term debt0 15,000 
Repayment of long-term debt(10,000)(132,500)
Deferred financing costs on long-term debt0 (775)
Payment of acquisition related contingent consideration0 (1,208)
Proceeds (outlays) from exercise of stock options and employee stock purchase plan2,459 (706)
Net cash used in financing activities(7,541)(120,189)
Effect of exchange rate changes on cash and cash equivalents248 8 
Increase (decrease) in cash and cash equivalents34 (200,481)
Cash and cash equivalents at beginning of period54,435 227,641 
Cash and cash equivalents at end of period$54,469 $27,160 
Supplemental disclosure of non-cash investing and financing activities:
Accrual for capital expenditures incurred during the period$(113)$214 
Fair value of contingent consideration for acquisitions0 14,900 
Six Months Ended
Nov 30, 2021Nov 30, 2020
Cash flows from operating activities:
Net loss$(15,323)$(8,536)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization14,276 13,013 
Non-cash lease expense1,209 1,265 
Stock based compensation5,437 4,251 
Change in fair value of contingent consideration804 (473)
Deferred income taxes(2,259)(1,553)
Change in accounts receivable allowances16 29 
Fixed and intangible asset impairments and disposals97 180 
Other(78)(230)
Changes in operating assets and liabilities:
Accounts receivable(2,922)(2,281)
Inventories478 10,528 
Prepaid expenses and other(4,184)(6,323)
Accounts payable, accrued and other liabilities(4,514)(3,847)
Net cash (used in) provided by operating activities(6,963)6,023 
Cash flows from investing activities:
Additions to property, plant and equipment(2,152)(3,185)
Additions to placement and evaluation units(7,189)— 
Cash paid for acquisitions(3,600)— 
Net cash used in investing activities(12,941)(3,185)
Cash flows from financing activities:
Proceeds from borrowings on long-term debt5,000 — 
Proceeds from exercise of stock options and employee stock purchase plan1,388 481 
Net cash provided by financing activities6,388 481 
Effect of exchange rate changes on cash and cash equivalents(354)271 
(Decrease) increase in cash and cash equivalents(13,870)3,590 
Cash and cash equivalents at beginning of period48,161 54,435 
Cash and cash equivalents at end of period$34,291 $58,025 
Supplemental disclosure of non-cash investing and financing activities:
Accrual for capital expenditures incurred during the period$65 $23 
The accompanying notes are an integral part of these consolidated financial statements.
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AngioDynamics, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(in thousands of dollars, except share data)

Common StockAdditional
paid in
capital		Accumulated deficitAccumulated
other
comprehensive
income		Treasury Stock
SharesAmountSharesAmountTotal
Balance at May 31, 202138,920,951 $377 $573,507 $(131,866)$3,153 (370,000)$(5,714)$439,457 
Net loss(6,972)(6,972)
Exercise of stock options80,635 1 1,279 1,280 
Issuance/Cancellation of restricted stock units279,495 (1,734)(1,734)
Issuance/Cancellation of performance share units59,371 — 
Purchases of common stock under ESPP49,789 1 899 900 
Stock-based compensation2,429 2,429 
Other comprehensive income, net of tax590 590 
Balance at August 31, 202139,390,241 $379 $576,380 $(138,838)$3,743 (370,000)$(5,714)$435,950 
Net loss(8,351)(8,351)
Exercise of stock options56,064 1,022 1,022 
Issuance/Cancellation of restricted stock units8,695 (83)(83)
Purchases of common stock under ESPP19333 
Stock-based compensation3,008 3,008 
Other comprehensive income, net of tax819 819 
Balance at November 30, 202139,455,193 $379 $580,330 $(147,189)$4,562 (370,000)$(5,714)$432,368 
Common StockAdditional
paid in
capital		Accumulated deficitAccumulated
other
comprehensive
income (loss)		Treasury Stock
SharesAmountSharesAmountTotal
Balance at May 31, 202038,448,536 $374 $561,871 $(100,318)$(1,341)(370,000)$(5,714)$454,872 
Net loss(4,268)(4,268)
Issuance/Cancellation of restricted stock units164,946 (143)(143)
Purchases of common stock under ESPP79,596 1 633 634 
Stock-based compensation1,864 1,864 
Other comprehensive income, net of tax2,095 2,095 
Balance at August 31, 202038,693,078 $375 $564,225 $(104,586)$754 (370,000)$(5,714)$455,054 
Net loss(4,268)(4,268)
Issuance/Cancellation of restricted stock units8,952 (10)(10)
Stock-based compensation2,387 2,387 
Other comprehensive income, net of tax1,180 1,180 
Balance at November 30, 202038,702,030 $375 $566,602 $(108,854)$1,934 (370,000)$(5,714)$454,343 
Net loss(3,544)(3,544)
Exercise of stock options81,636 1 1,353 1,354 
Issuance/Cancellation of restricted stock units9,103 (49)(49)
Purchases of common stock under ESPP84,598 1 672 673 
Stock-based compensation2,147 2,147 
Other comprehensive income, net of tax12 12 
Balance at February 28, 202138,877,367 $377 $570,725 $(112,398)$1,946 (370,000)$(5,714)$454,936 























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Common StockAdditional
paid in
capital		Retained earningsAccumulated
other
comprehensive
loss		Treasury StockCommon StockAdditional
paid in
capital		Accumulated deficitAccumulated
other
comprehensive
income (loss)		Treasury Stock
SharesAmountSharesAmountTotalSharesAmountSharesAmountTotal
Balance at May 31, 201937,984,382 $372 $555,040 $66,469 $(1,352)(370,000)$(5,714)$614,815 
Balance at May 31, 2020Balance at May 31, 202038,448,536 $374 $561,871 $(100,318)$(1,341)(370,000)$(5,714)$454,872 
Net lossNet loss(1,275)(1,275)Net loss(4,268)(4,268)
Exercise of stock options48,136 1 530 531 
Issuance/Cancellation of restricted stock unitsIssuance/Cancellation of restricted stock units287,087 (2,459)(2,459)Issuance/Cancellation of restricted stock units164,946 (143)(143)
Purchases of common stock under ESPPPurchases of common stock under ESPP40,270 628 628 Purchases of common stock under ESPP79,596 1 633 634 
Stock-based compensationStock-based compensation1,984 1,984 Stock-based compensation1,864 1,864 
Other comprehensive loss, net of tax(151)(151)
Balance at August 31, 201938,359,875 $373 $555,723 $65,194 $(1,503)(370,000)$(5,714)$614,073 
Other comprehensive income, net of taxOther comprehensive income, net of tax2,095 2,095 
Balance at August 31, 2020Balance at August 31, 202038,693,078 $375 $564,225 $(104,586)$754 (370,000)$(5,714)$455,054 
Net lossNet loss(2,736)(2,736)Net loss(4,268)(4,268)
Issuance/Cancellation of restricted stock unitsIssuance/Cancellation of restricted stock units4,051 0 Issuance/Cancellation of restricted stock units8,952 (10)(10)
Stock-based compensationStock-based compensation2,242 2,242 Stock-based compensation2,387 2,387 
Other comprehensive income, net of taxOther comprehensive income, net of tax231 231 Other comprehensive income, net of tax1,180 1,180 
Balance at November 30, 201938,363,926 $373 $557,965 $62,458 $(1,272)(370,000)$(5,714)$613,810 
Net loss(5,709)(5,709)
Exercise of stock options2,500 30 30 
Issuance/Cancellation of restricted stock units8,034 (25)(25)
Purchases of common stock under ESPP60,297 1588 589 
Stock-based compensation1,772 1,772 
Other comprehensive income, net of tax8 8 
Balance at February 29, 202038,434,757 $374 $560,330 $56,749 $(1,264)(370,000)$(5,714)$610,475 
Balance at November 30, 2020Balance at November 30, 202038,702,030 $375 $566,602 $(108,854)$1,934 (370,000)$(5,714)$454,343 

The accompanying notes are an integral part of these consolidated financial statements.
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AngioDynamics, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Balance Sheet as of February 28, 2021, the Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three and ninesix months ended February 28,November 30, 2021 and February 29, 2020, the Consolidated Balance Sheet as of November 30, 2021, the Consolidated Statements of Cash Flows for the six months ended November 30, 2021 and 2020, and the Consolidated Statements of Stockholders’ Equity for the threesix months ended February 28,November 30, 2021 and February 29, 2020 and the Consolidated Statements of Cash Flows for the nine months ended February 28, 2021 and February 29, 2020 have been prepared by the Company and are unaudited. The Consolidated Balance Sheet as of May 31, 20202021 was derived from audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to state fairly the financial position, changes in stockholders’ equity and comprehensive income, results of operations and cash flows as of and for the period ended February 28,November 30, 2021 (and for all periods presented) have been made.
The unaudited interim consolidated financial statements for the three and ninesix months ended February 28,November 30, 2021 and February 29, 2020 include the accounts of AngioDynamics, Inc. and its wholly owned subsidiaries, collectively, "us", "we" or the “Company”. All intercompany balances and transactions have been eliminated.
2. ACQUISITIONS
C3 Wave Tip LocationCamaro Support Catheter Asset Acquisition
On December 17, 2019,July 27, 2021, the Company acquired the C3 Wave tip location assetCamaro support catheter (rebranded as Syntrax) from QX Medical, Components Inc. ("MedComp")LLC for an aggregate purchase price of $10.0$4.0 million, which included an upfront payment of $3.6 million and $0.4 million in purchase price holdbacks, along with $5.0$1.0 million of potential future contingent consideration related to technicalrevenue milestones. This acquisition filled a gap insupports the Vascular Access portfolioAuryon product family and supports the Company's strategic plan. The Company accounted for this acquisition as an asset purchase. The Company recorded the amount paid at closing as inventory and fixed assets of $0.6$0.1 million and an intangible assets of a trademark of $0.9 million andasset product technology of $8.5$3.9 million. The intangible assetsasset will be amortized over 15 years. The contingent consideration is comprised of technicalrevenue milestones and will be accounted for when the contingency is resolved or becomes probable and reasonably estimable.
Eximo Acquisition
On October 2, 2019, the Company entered into a share purchase agreement to acquire Eximo Medical, Ltd., a pre-commercial stage medical device company with a proprietary 355nm B Laser Atherectomy technology. The aggregate purchase price of $60.7 million included an upfront payment of $45.8 million and contingent consideration with an estimated fair value of $14.9 million. This acquisition expands and complements the Company’s Vascular Interventions and Therapies product portfolio by adding the 355nm B Laser Atherectomy technology which treats Peripheral Artery Disease.
The Company accounted for the Eximo acquisition under the acquisition method of accounting for business combinations. Accordingly, the cost to acquire the assets was allocated to the underlying net assets in proportion to estimates of their respective fair values. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. Goodwill is non-deductible for income tax purposes.
The Company has not disclosed the amount of revenue and earnings for sales of Eximo products since acquisition, nor proforma information, because these amounts are not significant to the Company's financial statements. Acquisition-related costs associated with the Eximo acquisition, which are included in "acquisition, restructuring and other items, net" in the accompanying Consolidated Statements of Operations, were approximately $0.6 million in fiscal year 2020. The following table summarizes the final aggregate purchase price allocated to the net assets acquired:
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(in thousands)Final allocation
Accounts receivable$50 
Inventory150 
Prepaid and other current assets54 
Long-term deposits51 
Property, plant and equipment397 
Intangible assets:
Product technology60,300 
Goodwill11,427 
Total assets acquired$72,429 
Liabilities assumed
Accounts payable$84 
Other current liabilities615 
Deferred tax liabilities11,070 
Total liabilities assumed$11,769 
Net assets acquired$60,660 

The Company finalized the allocation of the purchase price to the assets acquired and liabilities assumed in the fourth quarter of fiscal year 2020.
The value assigned to the product technology was derived using the multi-period excess earnings method under the income approach. This approach estimates the excess earnings generated over the lives of the customers that existed as of the acquisition date and discounts such earnings to present value. The product technology is deemed to have a useful life of fifteen years and will be amortized on a straight-line basis over the useful life.
The goodwill arising from the acquisition consists largely of synergies and economies of scale the Company hopes to achieve from combining the acquired assets with the Company's current operations.
3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

Under ASC 606,Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
The Company has one primary revenue stream which is the sales of its products.
Disaggregation of Revenue
The following tables summarizetable summarizes net product revenuesales by Global Business Unit ("GBU") and geography:
Three Months Ended Feb 28, 2021Three Months Ended Feb 29, 2020
(in thousands)United StatesInternationalTotalUnited StatesInternationalTotal
Net sales
Vascular Interventions & Therapies$29,529 $3,722 $33,251 $26,788 $3,764 $30,552 
Vascular Access21,009 3,804 24,813 20,018 4,624 $24,642 
Oncology8,116 5,002 13,118 8,083 6,503 $14,586 
Total$58,654 $12,528 $71,182 $54,889 $14,891 $69,780 

Three Months Ended Nov 30, 2021Three Months Ended Nov 30, 2020
(in thousands)United StatesInternationalTotalUnited StatesInternationalTotal
Net sales
Endovascular Therapies$36,253 $3,407 $39,660 $30,689 $3,211 $33,900 
Vascular Access20,705 4,365 25,070 20,161 3,769 23,930 
Oncology8,392 5,158 13,550 9,834 5,106 14,940 
Total$65,350 $12,930 $78,280 $60,684 $12,086 $72,770 
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Nine Months Ended Feb 28, 2021Nine Months Ended Feb 29, 2020Six Months Ended Nov 30, 2021Six Months Ended Nov 30, 2020
(in thousands)(in thousands)United StatesInternationalTotalUnited StatesInternationalTotal(in thousands)United StatesInternationalTotalUnited StatesInternationalTotal
Net salesNet salesNet sales
Vascular Interventions & Therapies$87,198 $9,810 $97,008 $80,065 $10,551 $90,616 
Endovascular TherapiesEndovascular Therapies$71,006 $6,712 $77,718 $57,669 $6,088 $63,757 
Vascular AccessVascular Access60,392 16,456 76,848 57,865 12,720 $70,585 Vascular Access41,180 8,846 50,026 39,383 12,652 52,035 
OncologyOncology25,856 14,456 40,312 25,451 19,173 $44,624 Oncology17,628 9,879 27,507 17,740 9,454 27,194 
TotalTotal$173,446 $40,722 $214,168 $163,381 $42,444 $205,825 Total$129,814 $25,437 $155,251 $114,792 $28,194 $142,986 
As the Company has previously announced, the Company is focused on its ongoing transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company that delivers unique and innovative health care solutions. The Company believes that this transformation will enable the Company to shift the portfolio from the mature, lower-growth markets where we have competed in the past by investing in technology and products that provide access to larger and faster growing markets. As such, we believe the growth in the near to mid-term will be driven by our high technology products including Auryon, Thrombectomy (which includes AngioVac, AlphaVac and thrombolytics) and NanoKnife. We will refer to these high technology products as our Med Tech business and we will refer to the remainder of the portfolio as our Med Device business.
The following table summarizes net sales by Med Tech and Med Device:
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Net Sales
Med Tech$18,886 $13,849 $36,504 $24,335 
Med Device59,394 58,921 118,747 118,651 
Total$78,280 $72,770 $155,251 $142,986 
Net Product Revenue
The Company's products consist of a wide range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and for use in oncology and surgical settings. The Company's devices are generally used in minimally invasive, image-guided procedures. Most of the Company's products are intended to be used once and then discarded, or they may be implanted for short or long term use. The Company sells its products to its distribution partnersdistributors and to end users, such as interventional radiologists, interventional cardiologists, vascular surgeons, urologists, interventional and surgical oncologists and critical care nurses.
Contracts and Performance Obligations
The Company contracts with its customers based on customer purchase orders, which in many cases are governed by master purchasing agreements. The Company’s contracts with customers are generally for product only, and do not include other performance obligations such as services or other material rights. As part of its assessment of each contract, the Company evaluates certain factors including the customer’s ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations.
Transaction Price and Allocation to Performance Obligations
Transaction prices of products are typically based on contracted rates. Product revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer, net of any variable consideration as described below.
If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products underlying each performance obligation. The Company has standard pricing for its products and determines standalone selling prices based on the price at which the performance obligation is sold separately.


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Revenue Recognition
Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which occurs at a point in time, and may be upon shipment from the Company’s manufacturing site or delivery to the customer’s named location, based on the contractual shipping terms of a contract.
In determining whether control has transferred, the Company considers if there is a present right to payment from the customer and when physical possession, legal title and risks and rewards of ownership have transferred to the customer.
The Company typically invoices customers upon satisfaction of identified performance obligations. As the Company’s standard payment terms are 30 to 90 days from invoicing, the Company does not provide any significant financing to its customers.
The Company enters into agreements to place placement and evaluation units (“units”) at customer sites, but the Company retains title to the units. During the duration of these agreements the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables. These types of agreements include an embedded operating lease for the right to use the units. In these arrangements, revenue recognized for the sale of the disposables is not allocated between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value.
Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue.
Variable Consideration
Reserves: Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established for discounts, returns, rebates and allowances that are offered within contracts between the Company and its customers. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a contra asset.
Rebates and Allowances:The Company provides certain customers with rebates and allowances that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized.
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The Company establishes reserves for such amounts, which is included in accrued expenses in the accompanying Consolidated Balance Sheets. These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes and administrative fees thevolumes. The Company is also required to pay administrative fees to group purchasing organizations.
Product Returns: The Company generally offers customers a limited right of return. Product returns after 30 days must be pre-approved by the Company and customers may be subject to a 20% restocking charge. To be accepted, a returned product must be unadulterated, undamaged and have at least twelve months remaining prior to its expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its historical product return information and considers other factors that it believes could significantly impact its expected returns, including product recalls. During the ninesix months ended February 28,November 30, 2021, such product returns were not material.
Contract Balances with Customers
A receivable is generally recognized in the period the Company ships the product. Payment terms on invoiced amounts are based on contractual terms with each customer and generally coincide with revenue recognition. Accordingly, the Company does not have any contract assets associated with the future right to invoice its customers. In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in the accompanying Consolidated Balance Sheets.
The following table presents changes in the Company’s receivables, contract assets and contract liabilities with customers:
(in thousands)(in thousands)Feb 28, 2021May 31, 2020(in thousands)Nov 30, 2021May 31, 2021
ReceivablesReceivables$33,171 $31,263 Receivables$38,205 $35,405 
Contract assetsContract assets$0 $0 Contract assets$— $— 
Contract liabilitiesContract liabilities$589 $545 Contract liabilities$690 $426 
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During the ninesix months ended February 28,November 30, 2021, the Company had additions to contract liabilities of $1.0$0.8 million. This was offset by $1.0$0.5 million in revenue that was recognized during the ninesix months ended February 28,November 30, 2021.
Costs to Obtain or Fulfill a Customer Contract
Under ASC 606, the Company recognizesmay recognize an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs. The Company’s sales incentive compensation plans qualify for capitalization since these plans are directly related to sales achieved during a period of time. However, the Company has elected the practical expedient under ASC 340-40-25-4 to expense the costs as they are incurred within selling and marketing expenses since the amortization period is less than one year.
The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs, associated with the distribution of finished products to customers, are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer. Amounts charged to customers for shipping and handling are recorded in net sales.

4. INVENTORIES
Inventories are stated at lower of cost and net realizable value (using the first-in, first-out method). Inventories consisted of the following:
(in thousands)Feb 28, 2021May 31, 2020
Raw materials$21,237 $23,308 
Work in process8,508 8,318 
Finished goods19,261 28,279 
Inventories$49,006 $59,905 
(in thousands)Nov 30, 2021May 31, 2021
Raw materials$26,706 $22,925 
Work in process6,673 8,022 
Finished goods14,804 17,667 
Inventories$48,183 $48,614 
The Company periodically reviews inventory for both obsolescence and loss of value. The Company makes assumptions about the future demand for and market value of the inventory. Based on these assumptions, the Company estimates the amount of obsolete, expiring and slow-moving inventory. The total inventory reserve at February 28,November 30, 2021 and May 31, 20202021 was $4.0 million and $4.7$3.8 million, respectively.
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5. GOODWILL AND INTANGIBLE ASSETS
Intangible assets other than goodwill are amortized over their estimated useful lives on either a straight-line basis or proportionately to the benefit being realized. Useful lives range from two to eighteen years. The Company periodically reviews the estimated useful lives of its intangible assets and reviews such assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets or asset groups may not be recoverable. If an intangible asset or asset group is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset.Goodwill
Goodwill is not amortized, but rather, is tested for impairment annually or more frequently if impairment indicators arise. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination.
The Company's annual testing for impairment of goodwill was completed as of December 31, 2020. The Company operates as a single operating segment with 1 reporting unit and consequently evaluates goodwill for impairment based on an evaluation of the fair value of the Company as a whole. The Company determines the fair value of the reporting unit based on the market valuation approach and concluded that it was not more-likely-than-not that the fair value of the Company's reporting unit was less than its carrying value.
Even though the Company determined that there was 0no goodwill impairment as of December 31, 2020, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal, regulatory, business or economic conditions or a more-likely-than-not expectation that the reporting unit or a significant portion of the reporting unit will be sold or disposed of, would require an interim assessment for the reporting unit prior to the next required annual assessment as of December 31, 2021.
There were no adjustments to goodwill for the ninesix months ended February 28,November 30, 2021 other than foreign currency translation adjustments.
Definite Lived Intangible Assets
Intangible assets consistedother than goodwill are amortized over their estimated useful lives on a straight-line basis. Useful lives range from two to eighteen years. The Company periodically reviews, and adjusts, if necessary, the estimated useful lives of the following:
Feb 28, 2021
(in thousands)Gross carrying valueAccumulated amortizationNet carrying value
Product technologies$254,675 $(99,066)$155,609 
Customer relationships60,273 (33,142)27,131 
Trademarks10,150 (6,931)3,219 
Licenses6,087 (5,830)257 
$331,185 $(144,969)$186,216 

May 31, 2020
(in thousands)Gross carrying valueAccumulated amortizationNet carrying value
Product technologies$251,569 $(88,547)$163,022 
Customer relationships60,160 (30,018)30,142 
Trademarks10,150 (6,691)3,459 
Licenses6,087 (5,574)513 
$327,966 $(130,830)$197,136 
Amortization expenseits intangible assets and reviews such assets or asset groups for the three months ended February 28, 2021 and February 29, 2020 was $4.3 million and $5.0 million, respectively. Amortization expense for the nine months ended February 28, 2021 and February 29, 2020 was $13.8 million and $13.4 million, respectively.




impairment whenever events or changes in circumstances indicate
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that the carrying value of the assets or asset groups may not be recoverable. If an intangible asset or asset group is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset.
Intangible assets consisted of the following:
Nov 30, 2021
(in thousands)Gross carrying valueAccumulated amortizationNet carrying value
Product technologies$242,907 $(105,140)$137,767 
Customer relationships60,186 (36,067)24,119 
Trademarks9,950 (7,045)2,905 
Licenses6,087 (5,878)209 
$319,130 $(154,130)$165,000 
May 31, 2021
(in thousands)Gross carrying valueAccumulated amortizationNet carrying value
Product technologies$236,907 $(97,343)$139,564 
Customer relationships60,291 (34,164)26,127 
Trademarks9,950 (6,905)3,045 
Licenses6,087 (5,846)241 
$313,235 $(144,258)$168,977 
Amortization expense for the three months ended November 30, 2021 and 2020 was $4.9 million and $4.6 million, respectively. Amortization expense for the six months ended November 30, 2021 and 2020 was $9.7 million and $9.5 million, respectively.
Expected future amortization expense related to the intangible assets for each of the following fiscal years is as follows:
(in thousands)
Remainder of 2021$4,223 
202217,013 
202317,453 
202415,943 
202516,951 
2026 and thereafter114,633 
$186,216 
(in thousands)
Remainder of 2022$9,796 
202319,111 
202416,902 
202516,884 
202616,703 
2027 and thereafter85,604 
$165,000 

6. ACCRUED LIABILITIES
Accrued liabilities consisted of the following:
(in thousands)Nov 30, 2021May 31, 2021
Payroll and related expenses$13,308 $20,408 
Royalties2,260 2,663 
Accrued severance29 548 
Sales and franchise taxes1,081 631 
Outside services4,929 4,256 
Litigation Matters— 975 
Rebates771 544 
Other5,337 5,434 
$27,715 $35,459 
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(in thousands)Feb 28, 2021May 31, 2020
Payroll and related expenses$15,159 $13,059 
Royalties2,052 2,392 
Accrued severance370 794 
Sales and franchise taxes576 634 
Outside services2,291 2,222 
Indemnification holdback4,625 5,000 
Other5,687 5,279 
$30,760 $29,380 

7. LONG-TERM DEBT
On June 3, 2019 and in connection with the completion of the Fluid Management divestiture, the Company repaid all amounts outstanding under its then existing Credit Agreementcredit agreement and entered into a new Credit Agreement with the lenderslender's party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Bank of America, N.A. and KeyBank National Association, as co-syndication agents.
The Credit Agreement provides for a $125.0 million secured revolving credit facility (the “Revolving Facility”), which includes an uncommitted expansion feature that allows the Company to increase the total revolving commitments and/or add new tranches of term loans in an aggregate amount not to exceed $75.0 million.  The proceeds may be used to refinance certain existing indebtedness of the Company and its subsidiaries, to finance the working capital needs, and for general corporate purposes (including permitted acquisitions), of the Company and its subsidiaries.
The Credit Agreement has a five yearfive-year maturity. Interest on the facility is based, at the Company’s option, on either a base rate of LIBOR or alternate base rate, plus an applicable margin tied to the Company’s total leverage ratio and having ranges between 0.25% and 0.75% for base rate loans and between 1.25% and 1.75% for LIBOR loans. After default, the interest rate may be increased by 2.0%. The facility also carries a commitment fee of 0.20% to 0.25% per annum on the unused portion.
The Company's obligations under the Revolving Facility are unconditionally guaranteed, jointly and severally, by the Company's material direct and indirect domestic subsidiaries (the “Guarantors”). All obligations of the Company and the Guarantors under the Revolving Facility are secured by first priority security interests in substantially all of the assets of the Company and the Guarantors.
The Credit Agreement includes customary representations, warranties and covenants, and acceleration, indemnity and events of default provisions, including, among other things, 2 quarterly financial covenants as follows: 
•maximumMaximum leverage ratio of consolidated total indebtedness* to consolidated EBITDA* of not greater than 3.00 to 1.00 (during certain periods following material acquisitions the ratio shall be increased to 3.50 to 1.00).
•fixedFixed charge coverage ratio of consolidated EBITDA minus consolidated capital expenditures* to consolidated interest expense* paid or payable in cash plus scheduled principal payments in respect of indebtedness under the Credit Agreement of not less than 1.25 to 1.00.
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* The definitions of consolidated total indebtedness, consolidated EBITDA, consolidated capital expenditures and consolidated interest expense are specifically defined in the credit agreementCredit Agreement included as an exhibit to Form 8-K filed on June 6, 2019.
As of February 28,November 30, 2021, there was a $30.0$25.0 million outstanding balance on the Revolving Facility. As of February 28,November 30, 2021 and May 31, 2020,2021, the carrying value of long-term debt approximated its fair market value.
The interest rate on the Revolving Facility at February 28,November 30, 2021 was 1.63%1.34%.
The Company was in compliance with the Credit Agreement covenants as of February 28, 2021.

8. INCOME TAXES
The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year adjusted for any discrete events, which are recorded in the period that they occur.  The estimated annual effective tax rate prior to discrete items was 15.6%12.3% as of the thirdsecond quarter of fiscal year 2021,2022, as compared to 12.9%16.1% for the same period in fiscal year 2020.2021. In fiscal year 2021,2022, the Company’s effective tax rate differs from the U.S. statutory rate primarily due to the impact of the valuation allowance, foreign taxes, and other non-deductible permanent items (such as non-deductible meals and entertainment, Section 162(m) excess compensation and non-deductible share-based compensation).
The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realization of deferred tax assets requires significant management judgment. In determining whether its deferred tax assets are more likely than not realizable, the Company evaluated all available positive and negative evidence, and weighted the evidence based on its objectivity.
Based on the review of all available evidence, the Company determined that it has not yet attained a sustained level of profitability and the objectively verifiable negative evidence outweighed the positive evidence. Therefore, the Company has provided a valuation allowance on its federal and state net operating loss carryforwards, federal and state R&D credit carryforwards and other net deferred tax assets that have a limited life and are not supportable by the naked credit deferred tax liability sourced income as of February 28,November 30, 2021. The Company will continue to assess the level of the valuation allowance required. If sufficient positive evidence exists in future periods to support a release of some or all of the valuation allowance, such a release would likely have a material impact on the Company’s results of operations.

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9. SHARE-BASED COMPENSATION
On October 13, 2020, the Company's shareholders approved the 2020 Stock and Incentive Award Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance share units, performance shares and other incentive awards to the Company's employees, directors and other service providers. As of February 28,November 30, 2021, there was a maximum of 2.41.5 million shares of common stock available for future grant under the 2020 Plan.
Prior to the adoption of the 2020 Plan, equity awards were issued under the 2004 Stock and Incentive Award Plan (the “2004 Plan”). The adoption of the 2020 Plan did not impact the administration of equity awards issued under the 2004 Plan but following the adoption of the 2020 Plan, equity award grants are no longer made under the 2004 Plan.
The Company also has an employee stock purchase plan. As of February 28,November 30, 2021, there was a maximum of 4.02.4 million shares of common stock available for future grant under the employee stock purchase plan.
For the three months ended February 28,November 30, 2021 and February 29, 2020, share-based compensation expense was $2.1$3.0 million and $1.8$2.4 million, respectively. For the ninesix months ended February 28,November 30, 2021 and February 29, 2020, share-based compensation expense was $6.4$5.4 million and $6.0$4.3 million, respectivelyrespectively.
During the ninesix months ended February 28,November 30, 2021 and February 29, 2020, the Company granted stock options and restricted stock units under the 2004 Plan2020 and 20202004 Plan to certain employees and members of the Board of Directors. Stock option awards are valued using the Black-Scholes option-pricing model and then amortized on a straight-line basis over the requisite service period of the award. Restricted stock unit awards are valued based on the closing trading value of the Company’s common stock on the date of grant and then amortized on a straight-line basis over the requisite service period of the award.
During the ninesix months ended February 28,November 30, 2021 and February 29, 2020, the Company granted performance share units under the 2020 and 2004 Plan to certain employees. The awards may be earned by achieving relative performance levels over the requisite service period. The performance criteria are based on achieving certain performance targets and the total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of the common stock of a pre-defined industry peer-group.
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The fair value of these awards areis based on the closing trading value of the Company’s common stock on the date of grant and use a Monte Carlo simulation model.
As of February 28,November 30, 2021, there was $14.4$22.1 million of unrecognized compensation expense related to share-based payment arrangements. These costs are expected to be recognized over a weighted-average period of approximately fourthree years. The Company has sufficient shares to satisfy expected share-based payment arrangements.
10. EARNINGS PER SHARE
Basic earnings per share is based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per share includes the dilutive effect of potential common stock consisting of stock options, restricted stock units and performance stock units, provided that the inclusion of such securities is not anti-dilutive. In periods with a net loss, stock options and restricted stock units are not included in the computation of diluted loss per share as the impact would be anti-dilutive.
The following table reconciles basic to diluted weighted-average shares outstanding:
Three Months EndedNine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020Feb 28, 2021Feb 29, 2020
Basic38,360 37,999 38,281 37,924 
Effect of dilutive securities0 0 0 0 
Diluted38,360 37,999 38,281 37,924 
Securities excluded as their inclusion would be anti-dilutive3,003 2,699 3,033 2,656 
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Basic39,053 38,327 38,893 38,242 
Effect of dilutive securities— — — — 
Diluted39,053 38,327 38,893 38,242 
Securities excluded as their inclusion would be anti-dilutive3,510 3,133 3,510 3,159 

11. SEGMENT AND GEOGRAPHIC INFORMATION
The Company considers the business to be a single operating segment engaged in the development, manufacture and sale of medical devices for vascular access, peripheral vascular disease and oncology on a global basis. The Company's chief operating decision maker, the President and Chief Executive Officer (CEO), evaluates the various global product portfolios on a net sales basis.basis utilizing various breakouts of the data including Global Business Unit, Med Tech versus Med Device and
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geography. Executives reporting to the CEO include those responsible for commercial operations, manufacturing operations, regulatory and quality and certain corporate functions. The CEO evaluates profitability, investment and cash flow metrics on a consolidated worldwideglobal basis due to shared infrastructure and resources.
The table below summarizes net sales by Global Business Unit:
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Net Sales
Endovascular Therapies$39,660 $33,900 $77,718 $63,757 
Vascular Access25,070 23,930 50,026 52,035 
Oncology13,550 14,940 27,507 27,194 
Total$78,280 $72,770 $155,251 $142,986 
Three Months EndedNine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020Feb 28, 2021Feb 29, 2020
Net sales
Vascular Interventions & Therapies 
$33,251 $30,552 $97,008 $90,616 
Vascular Access24,813 24,642 76,848 70,585 
Oncology13,118 14,586 40,312 44,624 
Total$71,182 $69,780 $214,168 $205,825 
The table below summarizes net sales by Med Tech and Med Device:
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Net Sales
Med Tech$18,886 $13,849 $36,504 $24,335 
Med Device59,394 58,921 118,747 118,651 
Total$78,280 $72,770 $155,251 $142,986 
The table below summarizes net sales by geographic area based on external customer location:
Three Months EndedNine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020Feb 28, 2021Feb 29, 2020
Net sales
United States$58,654 $54,889 $173,446 $163,381 
International12,528 14,891 40,722 42,444 
Total$71,182 $69,780 $214,168 $205,825 
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Net Sales
United States$65,350 $60,684 $129,814 $114,792 
International12,930 12,086 25,437 28,194 
Total$78,280 $72,770 $155,251 $142,986 




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12. FAIR VALUE
On a recurring basis, the Company measures certain financial assets and financial liabilities at fair value based upon quoted market prices, where available. Where quoted market prices or other observable inputs are not available, the Company applies valuation techniques to estimate fair value. FASB ASC Topic 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:
•Level 1 - Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.

•Level 2 - Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.

•Level 3 - Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.
The Company's financial instruments include cash and cash equivalents, accounts receivable, accounts payable and contingent consideration. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable approximates fair value due to thetheir immediate or short-term maturities. The Company's recurring fair value measurements using significant unobservable inputs (Level 3) relate to contingent consideration liabilities.
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The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis:
Fair Value Measurements using inputs considered as:Fair Value at Feb 28, 2021
(in thousands)Level 1Level 2Level 3
Financial Liabilities
Contingent consideration for acquisition earn outs$0 $0 $15,362 $15,362 
Total Financial Liabilities$0 $0 $15,362 $15,362 
Fair Value Measurements using inputs considered as:Fair Value at May 31, 2020
(in thousands)Level 1Level 2Level 3
Financial Liabilities
Contingent consideration for acquisition earn outs$— $0 $15,647 $15,647 
Total Financial Liabilities$0 $0 $15,647 $15,647 
Fair Value Measurements using inputs considered as:Fair Value at Nov 30, 2021
(in thousands)Level 1Level 2Level 3
Financial Liabilities
Contingent consideration for acquisition earn outs$— $— $16,540 $16,540 
Total Financial Liabilities$— $— $16,540 $16,540 
Fair Value Measurements using inputs considered as:Fair Value at May 31, 2021
(in thousands)Level 1Level 2Level 3
Financial Liabilities
Contingent consideration for acquisition earn outs$— $— $15,741 $15,741 
Total Financial Liabilities$— $— $15,741 $15,741 
There were no transfers between Level 1, 2 and 3 for the three and ninesix months ended February 28, 2021.November 30, 2021 and 2020.
The table below presents the changes in fair value components of Level 3 instruments:
Three Months Ended Feb 28,Nov 30, 2021
(in thousands)Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance, November 30, 2020August 31, 2021$15,17815,936 
Total gains or losses (realized/unrealized):
Change in present value of contingent consideration (1)
183609 
Currency gain from remeasurement1 (5)
Balance, February 28,November 30, 2021$15,36216,540 


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NineSix Months Ended Feb 28,Nov 30, 2021
(in thousands)Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance, May 31, 20202021$15,64715,741 
Total gains or losses (realized/unrealized):
Change in present value of contingent consideration (1)
(290)804 
Currency gain from remeasurement5 (5)
Balance, February 28,November 30, 2021$15,36216,540 

(1) Change in the fair value of contingent consideration is included in earnings and comprised of changes in estimated earn out payments based on projections of Company performance and amortization of the present value discount.

Contingent ConsiderationLiability for Acquisition Earn Outs
Some of the Company's business combinations involve the potential for the payment of future contingent consideration upon the achievement of certain product development milestones or various other performance conditions. Payment of the additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified revenue levels or product development targets. Contingent consideration is recorded at the estimated fair value of the contingent payments on the acquisition date. The fair value of the contingent consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense within change in fair value of contingent consideration in the Consolidated Statements of Operations.
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The Company measures the initial liability and remeasures the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. The fair valuemeasurements, which is determined using a discounted cash flow model applied to projected net sales, using probabilities of achieving projected net sales and projected payment dates. Projected net sales are based on the Company's internal projections and extensive analysis of the target market and the sales potential. Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future.
The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of February 28,November 30, 2021:
(in thousands)Fair ValueValuation TechniqueUnobservable InputRange
Revenue based payments$15,362 Discounted cash flowDiscount rate5%
Probability of payment66% - 100%
Projected fiscal year of payment2024 - 2025

(in thousands)Fair ValueValuation TechniqueUnobservable InputRange
Revenue based payments$16,540 Discounted cash flowDiscount rate5%
Probability of payment66% - 100%
Projected fiscal year of payment2023 - 2025
At February 28,November 30, 2021, the rangeamount of estimated potential undiscounted future contingent consideration that the Company expects to pay as a result of all completed acquisitions is approximately $20.0 million. The milestones, including revenue projections and technical milestones associated with the contingent consideration must be reached in future periods ranging from fiscal years 20212022 to 2029 in order for the associated consideration to be paid.

13. LEASES
The Company determines if an arrangement is a lease at inception of the contract. The Company has operating leases for buildings, primarily for office space, R&D, manufacturing and warehousing.
Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Many of the lease agreements contain renewal or termination clauses that are factored into the determination of the lease term if it is reasonably certain that these options would be exercised. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.
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The following table presents supplemental balance sheet information related to leases:
(in thousands)Balance Sheet LocationFeb 28, 2021May 31, 2020
Assets
Operating lease ROU assetOther assets$9,945 $10,146 
Liabilities
Current operating lease liabilitiesOther current liabilities2,363 2,077 
Non-current operating lease liabilitiesOther long-term liabilities7,940 8,345 
Total lease liabilities$10,303 $10,422 
(in thousands)Balance Sheet LocationNov 30, 2021May 31, 2021
Assets
Operating lease ROU assetOther assets$8,159 $9,382 
Liabilities
Current operating lease liabilitiesOther current liabilities2,473 2,415 
Non-current operating lease liabilitiesOther long-term liabilities6,011 7,319 
Total lease liabilities$8,484 $9,734 

The interest rate implicit in lease agreements is typically not readily determinable, and as such the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is defined as the interest the Company would pay to borrow on a collateralized basis, considering factors such as length of lease term. The following table presents the weighted average remaining lease term and discount rate:
Feb 28,Nov 30, 2021
Weighted average remaining term (in years)4.353.68
Weighted average discount rate3.8 %
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The maturities of the lease liabilities for each of the following fiscal years is:
(in thousands)Nov 30, 2021
Remainder of 2022$1,361 
20232,773 
20242,195 
20251,440 
20261,139 
2027 and thereafter171 
Total lease payments$9,079 
Less: Imputed Interest595 
Total lease obligations$8,484 
Less: Current portion of lease obligations2,473 
Long-term lease obligations$6,011 
(in thousands)Feb 28, 2021
Remainder of 2021$675 
20222,733 
20232,784 
20242,206 
20251,451 
2026 and thereafter1,318 
Total lease payments$11,167 
Less: Imputed Interest864 
Total lease obligations$10,303 
Less: Current portion of lease obligations2,363 
Long-term lease obligations$7,940 
During the three months ended February 28,November 30, 2021 and February 29, 2020, the Company recognized $0.8$0.7 million and $0.9$0.7 million of operating lease expense, respectively, which includes immaterial short-term leases. During the ninesix months ended February 28,November 30, 2021 and February 29, 2020, the Company recognized $2.4$1.4 million and $2.5$1.6 million of operating lease expense, respectively, which includes immaterial short-term leases. The expenses on the Consolidated Statement of Operations were classified as follows:
Three Months EndedNine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020Feb 28, 2021Feb 29, 2020
Cost of sales$209 $297 $602 $856 
Research and development197 192 682 388 
Sales and marketing111 100 304 298 
General and administrative277 336 828 927 
$794 $925 $2,416 $2,469 
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Cost of sales$218 $192 $437 $393 
Research and development52 197 150 485 
Sales and marketing39 92 79 193 
General and administrative434 256 764 551 
$743 $737 $1,430 $1,622 



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The following table presents supplemental cash flow and other information related to leases for the ninesix months ended:
(in thousands)Feb 28, 2021Feb 29, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$2,020 $1,767 
ROU assets obtained in exchange for lease liabilities
Operating leases$1,585 $5,595 
(in thousands)Nov 30, 2021Nov 30, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$1,359 $1,360 
ROU assets obtained in exchange for lease liabilities
Operating leases$— $487 

14. COMMITMENTS AND CONTINGENCIES    
Legal Proceedings
The Company is involved in various legal proceedings, including commercial, intellectual property, product liability, and regulatory matters of a nature considered normal for its business. The Company accrues for amounts related to these matters if it is probable that a liability has been incurred, and an amount can be reasonably estimated. The Company discloses such matters when there is at least a reasonable possibility that a material loss may have been incurred. However, the Company cannot predict the outcome of any litigation or the potential for future litigation.
C.R. Bard, Inc. v. AngioDynamics, Inc.
On January 11, 2012, C.R. Bard, Inc. (“Bard”("Bard") filed a suit in the United States District Court of Utah claiming certain of the Company's implantable port products infringe on 3 U.S. patents held by Bard (US Patent Nos. 7,785,302 (“’302 Patent”), 7,959,615 (“615”’615 Patent”) and 7,947,022)7,947,022 (“’022 Patent”)). The case was stayed pending reexamination in the US Patent and Trademark Office ("USPTO"). Following the reexamination proceedings, and the parties’ related appeals to the Federal Circuit which resulted in further proceedings at the USPTO, certain claims of the 615 patent‘615 Patent were held invalid, while the remaining claims of the 615 patent‘615 Patent and the other 2 patents were upheld over the prior art references considered in the reexamination proceedings. Thereafter, on November 16, 2020, the court granted the Company’s motion to transfer the case was transferred from the District of Utah to the United States District Court for the District of Delaware (“("District of Delaware”Delaware"). The partiesA scheduling order was entered on March 23, 2021. On July 22, 2021, in
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another case against a different defendant the District of Utah invalidated multiple claims of the ‘302, ‘022, and ‘615 Patents under 35 USC §101, including claims asserted against the Company. Following the Utah court’s decision, the Company filed a proposed scheduling orderMotion for Judgment on March 12,the Pleadings based on collateral estoppel on August 9, 2021. Bard filed its opposition brief on September 2, 2021 and the Company filed a reply on September 9, 2021. Following a hearing on the Motion for Judgment on the Pleadings on December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal from the Utah Decision. Previously, the Company had filed a Motion for Leave to Amend its Answer and Counterclaims on April 14, 2021. This motion sought to add counterclaims for infringement of U.S. Patent Nos. 9,168,365; 9,895,523; and 10,632,295, as well as a counterclaim of inequitable conduct. On November 5, 2021, the Company notified the District of Delaware that the Utah decision was certified for appeal to the Court of Appeals for the Federal Circuit. Contemporaneously, the Company withdrew its Motion for Leave to Amend its Answer and Counterclaims without prejudice to refile. Bard filed its Opening Appellate Brief in its appeal at the Federal Circuit on December 8, 2021. The Company believes these claims are without merit and intends to defend them vigorously. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.
On March 10, 2015, Bard and Bard Peripheral Vascular filed suit in the District of Delaware claiming certain of the Company's implantable port products infringe on 3 U.S. patents held by Bard (US Patent Nos. 8,475,417, 8,545,460, 8,805,478). The case proceeded through trial which began on March 4, 2019. On day four of the jury trial, atAt the close of Bard’s case, the Court granted the Company's oral motion for judgment as a matter of law as well as its motions for summary judgment on the grounds that the asserted patents are invalid, ineligible, not infringed and not willfully infringed. On May 10, 2019, the Company filed a motion for attorney fees and non-taxable expenses under 35 USC Sec. 285, which remains stayed in the case.285. Bard appealed the judgment to the Federal Circuit and on November 10, 2020, the Federal Circuit reversed the judgment in part with respect to Section 101 (subject matter eligibility), and vacated and remanded the trial court’s invalidity and non-infringement judgments. The Company filed a combined Petition for rehearing and rehearing en banc on December 10, 2020, which was denied on January 15, 2021. The Federal Circuit issued its mandate on January 22, 2021. On March 15, 2021, the District of Delaware entered an order requiring the parties to submit status reports and denied as moot the Company’s motion for attorney’s fees and expenses. The matter remains pending.parties agreed to schedule trial the week of May 9, 2022, and the trial has been docketed on the Court's calendar. The Company maintains its belief that Bard’s claims are without merit. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.
On March 8, 2021, Bard filed suit in the District of Delaware asserting certain of the Company’s port products (including certain related infusion sets) infringe U.S. Patent Nos. 8,025,639, 9,603,992 (“’992”) and 9,603,993.9,603,993 (“’993”). On May 20, 2021, the Company filed a Motion to Dismiss Bard’s claims with respect to the ’992 and ’993 patents. On July 22, 2021, the Company submitted the Utah court’s decision invalidating claims of the related ‘302, ‘022, and ‘615 Patents as supplemental authority in support of its Motion to Dismiss. The Company has not yet answered,parties agreed to submit supplemental briefing to address the Utah court’s decision. Bard submitted its brief on August 12, 2021, and the matter remains pending.Company submitted its reply on September 2, 2021. On December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal of the Utah decision invalidating multiple claims the ‘302, ‘022, and ‘615 patents under 35 USC §101. The Company maintains its belief that Bard’s claims of the related are without merit. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.

AngioDynamics, Inc. v. C.R. Bard, Inc.
On May 30, 2017, the Company commenced an action in the United States District Court for the Northern District of New York entitled AngioDynamics, Inc. v. C.R. Bard, Inc. and Bard Access Systems, Inc. (“Bard”). In this action, the Company alleges that Bard has illegally tied the sales of its tip location systems to the sales of its PICCs. The Company alleges that this practice violates the federal antitrust laws and has had, and continues to have, an anti-competitive effect in the market for
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PICCs. The Company seeks both monetary damages and injunctive relief. Bard moved to dismiss on September 8, 2017. On August 6, 2018 the court denied Bard’s motion in its entirety. Bard made a motion for summary judgment which was denied in its entirety in a decision issued by the Court on May 5, 2021. Bard also raised a series of challenges targeted at one of AngioDynamics’ expert witnesses, which the Court denied in part and granted in part in decisions on May 5, 2021 and June 11, 2021. Discovery is largely complete, summary judgment, including all reply briefs, were fully briefed in October 2020, and the case will subsequently proceedtrial is scheduled to trial thereafter.commence on July 5, 2022.
Merz North America Settlement
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On May 16, 2019, Merz North America, Inc. (“Merz”) commenced an action in the United States District Court for the Southern District
Table of New York entitled Merz North America, Inc. v. AngioDynamics, Inc. In this action, Merz alleged breach of contract against AngioDynamics based on a March 1, 2016 Distribution Agreement. On June 28, 2019, AngioDynamics reached a settlement with Merz. AngioDynamics made a lump-sum payment of $2.5 million to Merz in return for dismissal of the case with prejudice during the first quarter of fiscal year 2020. The case was subsequently dismissed.Contents

15. ACQUISITION, RESTRUCTURING, AND OTHER ITEMS, NET
Acquisition, Restructuring and Other Items
Acquisition, restructuring and other items, net, consisted of:
Three Months EndedNine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020Feb 28, 2021Feb 29, 2020
Legal (1)
$967 $637 $2,947 $1,989 
Mergers and acquisitions (2)
0 154 1 782 
Transition service agreement (3)
(323)(386)(1,032)(1,720)
Divestiture (4)
8 781 393 2,241 
Restructuring0 0 0 26 
Other(42)379 748 1,168 
Total$610 $1,565 $3,057 $4,486 
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Legal (1)
$2,072 $1,185 $4,156 $1,980 
Mergers and acquisitions (2)
59 — 59 1 
Transition service agreement (3)
— (334)— (709)
Divestiture (4)
— 112 — 384 
Manufacturing relocation (5)
59 — 59 — 
Other63 165 419 791 
Total$2,253 $1,128 $4,693 $2,447 
(1) Legal expenses related to litigation that is outside the normal course of business.
(2) Mergers and acquisitions expensesexpense related to investment banking, legal and due diligence.
(3) Transition services agreement that was entered into as a result of the sale of the Fluid Management business.
(4) Divestiture expenses incurred to transition manufacturing from Glens Falls, NY to Queensbury, NY.

Included in the $2.0 million in legal for the nine months ended February 29, 2020 is a $0.4 million settlement received for the Biolitec bankruptcy litigation. The settlement received partially offsets legal expenses paid related(5) Expenses to the settlement proceedings.relocate certain manufacturing lines from Queensbury, NY to Costa Rica.

16. ACCUMULATED OTHER COMPREHENSIVE INCOME
Changes in each component of accumulated other comprehensive income, net of tax, are as follows:
Three Months Ended Feb 28,Nov 30, 2021
(in thousands)Foreign currency translation income
Balance at November 30, 2020August 31, 2021$1,9343,743 
Other comprehensive income, before reclassifications, net of tax12819 
Amounts reclassified from accumulated other comprehensive loss0 
Net other comprehensive income$12819 
Balance at February 28,November 30, 2021$1,9464,562 
Six Months Ended Nov 30, 2021
(in thousands)Foreign currency translation income
Balance at May 31, 2021$3,153 
Other comprehensive income, net of tax1,409 
Net other comprehensive income$1,409 
Balance at November 30, 2021$4,562 

17. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Recently Issued Accounting Pronouncements - Adopted
There are no recently issued accounting pronouncements that have been adopted.


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Nine Months Ended Feb 28, 2021
(in thousands)Foreign currency translation income
Balance at May 31, 2020$(1,341)
Other comprehensive income before reclassifications, net of tax3,287 
Amounts reclassified from accumulated other comprehensive loss0 
Net other comprehensive income$3,287 
Balance at February 28, 2021$1,946 

17. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The following table provides a description of recent accounting pronouncements that may have a material effect on the Company's consolidated financial statements:
Recently Issued Accounting Pronouncements - Adopted
StandardDescriptionDate AdoptedEffect on the Consolidated Financial Statements
ASU 2018-13, Fair Value Measurement (Topic 820)
This ASU removes, modifies and adds various disclosure requirements related to fair value disclosures. Disclosures related to transfers between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses for the period and unobservable inputs used in determining level 3 fair value measurements will be added, among other changes.June 1, 2020The Company adopted the new standard in the first quarter of fiscal year 2021 and it did not have an impact on the Company's consolidated financial statements.
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
This ASU replaces the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates.June 1, 2020The Company adopted the new standard in the first quarter of fiscal year 2021 and it did not have an impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements - Not Yet Applicable or Adopted
StandardDescriptionEffective DateEffect on the Consolidated Financial Statements
ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer.
June 1, 2023

There are no other new accounting pronouncements issued that are expected to have a material impact on ourThe Company plans to adopt the new standard in the first quarter of fiscal year 2024 and does not expect there to be a material impact to the consolidated financial statements.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read together with the consolidated financial statements and the notes thereto and other information included elsewhere in this quarterly report on Form 10-Q. The following discussion should be read in conjunction with the Company's 20202021 Annual Report on Form 10-K, and the consolidated financial statements and notes thereto included elsewhere in the Form 10-Q.
Disclosure Regarding Forward-Looking Statements
This quarterly report on Form 10-Q, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics’ expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as “expects,” “reaffirms,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” "projects,"“projects,” or variations of such words and similar expressions, are forward-looking statements. These forward lookingforward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ materially from our expectations, expressed or implied. Factors that may affect our actual results achieved include, without limitation, our ability to develop existing and new products, future actions by FDA or other regulatory agencies, results of pending or future clinical trials, the results of ongoing litigation, overall economic conditions (including inflation and labor shortages), general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, our ability to integrate purchased businesses and other factors including natural disasters and pandemics (such as the scope, scale and duration of the impact of the novel coronavirus, COVID-19). Other risks and uncertainties include, but are not limited to, the factors described from time to time in our reports filed with the Securities and Exchange Commission (the "SEC").
Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this quarterly report on Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, investors are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date stated, or if no date is stated, as of the date of this report. AngioDynamics disclaims any obligation to update the forward-looking statements. 
Disclosure Regarding Trademarks
This report includes trademarks, tradenames and service marks that are our property or the property of other third parties. Solely for convenience, such trademarks and tradenames sometimes appear without any “™” or “®” symbol. However, failure to include such symbols is not intended to suggest, in any way, that we will not assert our rights or the rights of any applicable licensor, to these trademarks and tradenames. For a complete listing of all our trademarks, tradenames and service marks please visit www.angiodynamics.com/IP. Information on our website or connected to our website is not incorporated by reference into this Quarterly Report on Form 10-Q.
Executive Overview
We design, manufacture and sell a wide range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and for use in oncology and surgical settings. Our devices are generally used in minimally invasive, image-guided procedures. Many of our products are intended to be used once and then discarded, or they may be temporarily implanted for short- or longer-term use.
Our business operations cross a variety of markets. Our financial performance is impacted by changing market dynamics, which have included an emergence of value-based purchasing by healthcare providers, consolidation of healthcare providers, the increased role of the consumer in health care decision-making and an aging population, among others. In addition, our growth is impacted by changes within our sector, such as the merging of competitors to gain scale and influence; changes in the regulatory environment for medical device;devices; and fluctuations in the global economy.
Our sales and profitability growth also depends, in part, on the introduction of new and innovative products, together with ongoing enhancements to our existing products. Expansions of our product offerings are created through internal and external product development, technology licensing and strategic alliances. We recognize the importance of, and intend to continue to
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make investments in research and development activities and selective business development opportunities to provide growth opportunities.
We sell our products in the United States primarily through a direct sales force, and outside the U.S. through a combination of direct sales and distributor relationships. Our end users include interventional radiologists, interventional cardiologists, vascular surgeons, urologists, interventional and surgical oncologists and critical care nurses. We expect our businesses to grow in both sales and profitability by expanding geographically, penetrating new markets, introducing new products and increasing our presence internationally.
The COVID-19 global pandemic has impacted our business and may continue to pose significantfuture risks to our business. It remains too early to quantifywith the impact this situation will have on fiscal year 2021 or beyond, butemergence of new variants. Even with the public health actions being undertakenthat have been taken to reduce the spread of the virus, and continued spikes in cases experienced in various regions in which we conduct business are causing and may continuethe market continues to cause significantexperience disruptions with respect to consumer demand, hospital operating procedures and workflow, ourtrends that may continue. The Company's ability to
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continue to manufacture products, and the reliability of our supply chain.chain, labor shortages, backlog and inflation (including the cost of raw materials, direct labor and shipping) have impacted our business, trends that may continue. Accordingly, management is evaluatingcontinues to evaluate the Company’s liquidity position, communicatingcommunicate with and monitoringmonitor the actions of our customers and suppliers, and reviewingreview our near-term financial performance as we manage the Company through the uncertainty related to the novel coronavirus.
In the third quarter of fiscal year 2021, a benefit of $1.9 million was recorded as a result of the employee retention credit that the Company filed for under the provisions of the CARES Act.performance.
In evaluating the operating performance of our business, management focuses on revenue, gross margin, operating income, earnings per share and cash flow from operations. A summary of these key financial metrics for the three and ninesix months ended February 28,November 30, 2021 compared to the three and ninesix months ended February 29,November 30, 2020 are as follows:

Three months ended February 28,November 30, 2021:

•Revenue increased by 2.0%7.6% to $71.2$78.3 million.
•Gross margin decreased 370 bps to 54.1%.
•Operating loss decreased by $2.5 million to $3.7 million.
•Loss per share decreased by $0.06 to a lossMed Tech growth of $0.09.

Nine months ended February 28, 2021:

•Revenue increased by 4.1% to $214.2 million.36.4% and Med Device growth of 0.8%.
•Gross marginprofit decreased 490340 bps to 53.4%51.8%.
•OperatingNet loss increased by $3.2$4.1 million to $13.7$8.4 million.
•Loss per share increased by $0.06$0.10 to a loss of $0.32.$0.21.
Six months ended November 30, 2021:
•Revenue increased by 8.6% to $155.3 million.
•Med Tech growth of 50.0% and Med Device growth of 0.1%.
•Gross profit decreased 110 bps to 52.0%.
•Net loss increased by $6.8 million to $15.3 million.
•Loss per share increased by $0.17 to a loss of $0.39.
•Cash providedused in operations increased by operations increased by $30.3$13.0 million to $11.9$7.0 million.
The ongoing recovery fromIn our Med Tech business, comprised of Auryon, the COVID-19 pandemic has had a varying impact on each of our three businesses. Our Vascular Interventions & TherapiesThrombectomy portfolio and Vascular Access businesses performedNanoKnife, Auryon and the strongest of the businessesThrombectomy portfolio experienced improved performance during the quarter. Thesecond quarter of fiscal year 2022 as the number of procedures increased. In our Med Device business, Vascular Access, also improved from the COVID-19 lows in the second halfquarter of last fiscal year but remain below pre-COVID-19 levels. Our2022 compared to the prior year period. This was partially offset by our Oncology businessproducts, which continued to face pressure from reductions in procedure volumes due to challenges resulting from the COVID-19 pandemic and the resulting challenging capital spending environment. We continued supporting and progressing our key growth initiatives (AngioVac, Auryon and NanoKnife), managing operating expenses and managing our cash and balance sheet.
New Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 17 to our consolidated financial statements in this Quarterly Report on Form 10-Q.pandemic.
Results of Operations for the Three Months Ended February 28, 2021 and February 29, 2020
For the three months ended February 28,November 30, 2021, the Company reported a net loss of $3.5$8.4 million, or a loss of $0.09$0.21 per diluted share, on net sales of $71.2$78.3 million, compared with a net loss of $5.7$4.3 million, or a loss of $0.15$0.11 per diluted share, on net sales of $69.8$72.8 million during the same quarter of the prior year. For the six months ended November 30, 2021, the Company reported a net loss of $15.3 million, or a loss of $0.39 per diluted share, on net sales of $155.3 million, compared with a net loss of $8.5 million, or a loss of $0.22 per diluted share, on net sales of $143.0 million during the same period of the prior year.
Net Sales

Net sales - Net sales are derived from the sale of products and related freight charges, less discounts, rebates and returns.

The table below summarizes net sales by Med Tech and Med Device:
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Three Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020% Change
Net Sales by Global Business Unit
       Vascular Interventions & Therapies$33,251 $30,552 8.8%
       Vascular Access24,813 24,642 0.7%
       Oncology13,118 14,586 (10.1)%
            Total$71,182 $69,780 2.0%
Net Sales by Geography
       United States$58,654 $54,889 6.9%
       International12,528 14,891 (15.9)%
           Total$71,182 $69,780 2.0%
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020% ChangeNov 30, 2021Nov 30, 2020% Change
Net Sales
Med Tech$18,886 $13,849 36.4%$36,504 $24,335 50.0%
Med Device59,394 58,921 0.8%118,747 118,651 0.1%
Total$78,280 $72,770 7.6%$155,251 $142,986 8.6%
Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020% ChangeNov 30, 2021Nov 30, 2020% Change
Net Sales by Global Business Unit
       Endovascular
       Therapies		$39,660 $33,900 17.0%$77,718 $63,757 21.9%
       Vascular Access25,070 23,930 4.8%50,026 52,035 (3.9)%
       Oncology13,550 14,940 (9.3)%27,507 27,194 1.2%
            Total$78,280 $72,770 7.6%$155,251 $142,986 8.6%
Net Sales by Geography
       United States$65,350 $60,684 7.7%$129,814 $114,792 13.1%
       International12,930 12,086 7.0%25,437 28,194 (9.8)%
           Total$78,280 $72,770 7.6%$155,251 $142,986 8.6%
For the three months ended February 28,November 30, 2021, net sales increased $1.4$5.5 million to $71.2$78.3 million compared to the same period in the prior year. For the six months ended November 30, 2021, net sales increased $12.3 million to $155.3 million compared to the same period in the prior year. At November 30, 2021, the Company had a backlog of $4.0 million.
Vascular Interventions & TherapiesThe Med Tech business net sales increased $5.0 million and $12.2 million for the three and six months ended November 30, 2021 compared to the same periods in the prior year, respectively. The change in sales for both periods was primarily driven by:

•Increased Auryon sales of $4.2 million and $9.0 million compared to the same periods in the prior year, respectively;
•Total Vascular Interventions & Therapies net salesGrowth in the thrombectomy platform driven by the AngioVac business of $1.2 million and $1.9 million, compared to the same periods in the prior year, respectively, as the Company saw increased $2.7 million, or 8.8%. Auryon, which was acquired as partcase volumes in AngioVac despite continued COVID-19 challenges along with the limited market launch of the Eximo acquisition inAlphaVac product during the second quarter of fiscal year 2020, contributed $3.32022; and
•Decreased NanoKnife sales of $0.7 million for the three months ended November 30, 2021 compared to the same period in sales. Additionally, the AngioVac business grew $1.3prior year and increased NanoKnife sales of $1.0 million asfor the Company continuedsix months ended November 30, 2021 compared to see increased case volumesthe same period in AngioVac, which increased 38% from the prior year. These increases were partiallyThe decrease for the three months ended November 30, 2021 was driven by decreased capital sales offset by lower volumea $0.2 million increase in Venous products due to fewer elective procedures duringdisposable sales, mainly in Europe. For the COVID-19 pandemic and decreased volumesix months ended November 30, 2021, NanoKnife disposable sales increased $1.0 million, driven by sales in the Core business.U.S. and Europe, with consistent capital sales.
The Med Device business net sales increased $0.5 million and $0.1 million for the three and six months ended November 30, 2021 compared to the same periods in the prior year, respectively. Excluding the large UK order in the first quarter of the prior year, net sales increased $5.3 million for the six months ended November 30, 2021. The change in sales for both periods was primarily driven by:
•U.S. Vascular Interventions & Therapies net sales increased $2.7 million due to increasedIncreased case volume for the three months ended November 30, 2021 compared to the same period in AngioVac and $3.3 millionthe prior year which resulted in increased sales of Auryon, which wereCore and BioSentry products of $0.7 million and $0.1 million, respectively. PICCs and Port sales also increased $0.9 million and $0.6 million, respectively with the primary contributors toincrease in PICCs driven by sales in the 10.2% growthU.S. and Latin America and the increase in Ports driven solely by sales in the U.S. These increases for the three months ended November 30, 2021 compared to the same period in the prior year were partially offset by decreased Venous, Midline, Radio Frequency Ablation, Microwave and Balloon sales volume in Venous and the Core business.
•International Vascular Interventions & Therapies sales remained consistent with the prior year.

Vascular Access

•Total Vascular Access net sales increasedof $0.7 million, $0.2 million, due to increased sales in Midlines. BioFlo product lines comprise 50% of overall Vascular Access sales compared to 51% a year ago.
•U.S. Vascular Access net sales increased $1.0$0.5 million, as a result of increased sales of Midlines, PICCs$0.2 million and dialysis.
•International Vascular Access net sales decreased by $0.8 million.

Oncology

•Total Oncology net sales decreased $1.5$0.1 million, year over year primarily due to a large NanoKnife distributor order in the Asia Pacific region ("APAC") in the prior year.
•While U.S. Oncology net sales increased across the majority of product lines, this was offset by Balloon product sales which decreased $0.3 million due to lower volumes.

The Company has discussed the ongoing transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company that delivers unique and innovative health care solutions. The Company believes that this transformation will enable the Company to shift the portfolio from the mature, lower-growth markets where we have competed in the past by investing in technology and products that provide access to larger and faster growing markets. As such, the growth in the near to mid-term will be driven by our high technology platforms including AngioVac, Auryon and NanoKnife.

respectively;
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•Increased case volume for the six months ended November 30, 2021 compared to the same period in the prior year, which resulted in increased sales of Core and BioSentry products of $2.9 million and $0.4 million, respectively. Port sales also increased $1.9 million, driven primarily by sales in the U.S. These increases for the six months ended November 30, 2021 compared to the same period in the prior year were partially offset by decreased Venous, Midline, PICCs, Dialysis, Radio Frequency Ablation and Microwave sales of $0.1 million, $2.0 million, $1.6 million, $0.4 million, $0.4 million and $0.6 million, respectively;
•Midlines, PICCs and Ports increased $3.5 million, excluding the prior year order in the UK, for the six months ended November 30, 2021 compared to the prior year period; and
•The backlog of $4.0 million at November 30, 2021, which was primarily related to Med Device products.
Gross Profit, Operating expenses, and Other income (expense)
Three Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020% Change
Gross profit$38,530 $40,299 (4.4)%
Gross profit % of sales54.1 %57.8 %
Research and development$8,565 $8,395 2.0 %
% of sales12.0 %12.0 %
Selling and marketing$19,607 $20,934 (6.3)%
% of sales27.5 %30.0 %
General and administrative$9,011 $10,203 (11.7)%
% of sales12.7 %14.6 %

Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020% ChangeNov 30, 2021Nov 30, 2020% Change
Gross profit$40,555 $40,174 0.9 %$80,694 $75,938 6.3 %
Gross profit % of sales51.8 %55.2 %52.0 %53.1 %
Research and development$8,199 $9,712 (15.6)%$15,593 $18,721 (16.7)%
% of sales10.5 %13.3 %10.0 %13.1 %
Selling and marketing$23,606 $20,174 17.0 %$48,052 $37,879 26.9 %
% of sales30.2 %27.7 %31.0 %26.5 %
General and administrative$9,678 $9,219 5.0 %$18,621 $17,776 4.8 %
% of sales12.4 %12.7 %12.0 %12.4 %
Gross profit - Gross profit consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.

Gross profit decreasedincreased by $1.8$0.4 million for the three months ended November 30, 2021 compared to the same period in the prior year. The change is primarily attributable to the following:
•Sales volume positively impacted gross profit by $0.8 million year over year.$3.3 million;
•Net productivityPrice and mix negatively impacted gross profit by $2.9 million primarily as a result of under absorption of $1.5 million and increased start-up costs of $1.4 million related to the Auryon launch. The under absorption in manufacturing operations was due to the Company maintaining staffing levels during the COVID-19 global pandemic to mitigate risk, along with a focus on working capital management through inventory reduction.
•Mix negatively impacted gross margin by $0.4 million as a result of increased sales of Vascular Access products and decreased sales of NanoKnife capital sales.capital. This negative impact was partially offset by increased sales of Auryon and AngioVac sales.products;
•A benefitLabor shortages, inflationary costs on raw materials and production volume negatively impacted gross profit by $1.7 million; and
•Start-up costs related to Auryon and AlphaVac of $0.7$0.8 million, was recordedincluding depreciation on Auryon placement units of $0.4 million, negatively impacted gross profit.
Gross profit increased by $4.8 million for the six months ended November 30, 2021 compared to the same period in the prior year. The change is primarily attributable to the following:    
•Sales volume positively impacted gross profit by $6.9 million;
•Price and mix positively impacted gross profit by $1.3 million as a result of the employee retention credit that the Company filed for under the provisionsincreased sales of the CARES Act in the third quarterAuryon and AngioVac products. This positive impact was partially offset by increased sales of the current year.Vascular Access products;

•Start-up costs related to Auryon and AlphaVac of $1.7 million, including depreciation on Auryon placement units of $0.6 million, negatively impacted gross profit; and
•Labor shortages, freight and inflationary costs on raw materials, negatively impacted gross profit by $1.7 million year over year.
Research and development expense - Research and development (“R&D”) expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, and manage clinical, regulatory and medical affairs.

R&D expense increased $0.2decreased $1.5 million and $3.1 million for the three and six months ended November 30, 2021 compared to the same period in the prior year.year, respectively. The change from each period is primarily attributable to:
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•The timing of certain projects, which reduced R&D project expense by $0.7 million and $2.1 million for the three and six months ended November 30, 2021 compared to the following:

same periods in the prior year, respectively; and
•Open R&D expenses relatedpositions, which resulted in decreased compensation and benefits expense of $0.7 and $1.1 million for the three and six months ended November 30, 2021 compared to the AngioVac platform expansion, the NanoKnife DIRECT© study and the Pathfinder study increased $1.2 million. This was partially offset by decreased expenses of $0.2 million related to Auryon.
•Outside consultant expense and other expenses decreased $0.3 million along with decreased travel expenses of $0.2 million.
•A benefit of $0.3 million was recorded as a result of the employee retention credit that the Company filed for under the provisions of the CARES Actsame periods in the third quarter of the current year.prior year, respectively.

Sales and marketing expense - Sales and marketing (“S&M”) expense consists primarily of salaries, commissions, travel and related business expenses, attendance at medical society meetings, product promotions and marketing activities.

S&M expense decreased $1.3increased $3.4 million and $10.2 million for the three and six months ended November 30, 2021 compared to the same period in the prior year.year, respectively. The change from each period is primarily attributable to the following:

to:
•Travel expenses decreased $1.2 million due to less travel as a result of the COVID-19 pandemic. In addition, tradeshow and other expenses decreased $1.1 million primarily due to the cancellation of events.
•Expenses related toAdditional headcount from the build-out of the Auryon sales and marketing teams, which increased compensation and benefits expense by $2.5 million and $6.8 million for the three and six months ended November 30, 2021 compared to prepare for full product launch of $2.0 million.the same periods in the prior year, respectively; and
•A benefitIncreased travel, meeting and tradeshow expenses of $0.9$1.0 million was recorded as a result ofand $3.2 million for the employee retention credit thatthree and six months ended November 30, 2021 compared to the Company filed for under the provisions of the CARES Actsame period in the third quarter of the current year.prior year, respectively, as some COVID-19 restrictions were lifte

d.
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General and administrative expense - General and administrative (“G&A”) expense includes executive management, finance, information technology, human resources, business development, legal, and the administrative and professional costs associated with those activities.

G&A expense decreased $1.2increased $0.5 million and $0.8 million for the three and six months ended November 30, 2021 compared to the same period in the prior year.year, respectively. The change from each period is primarily attributable to:
•Additional headcount, which increased compensation and benefits expense by $0.5 million and $1.3 million for the three and six months ended November 30, 2021 compared to the following:

same period in the prior year, respectively; and
•Legal expensesexpense decreased $1.5$1.4 million offset by other outside consultant spend of $0.8 million for the six months ended November 30, 2021 compared to the same period in the prior year.
Three Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020$ Change
Amortization of intangibles$4,292 $5,019 $(727)
Change in fair value of contingent consideration$183 $419 $(236)
Acquisition, restructuring and other items, net$610 $1,565 $(955)
Other income (expense), net$(389)$(297)$(92)

Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020$ ChangeNov 30, 2021Nov 30, 2020$ Change
Amortization of intangibles$4,889 $4,593 $296 $9,710 $9,546 $164 
Change in fair value of contingent consideration$609 $184 $425 $804 $(473)$1,277 
Acquisition, restructuring and other items, net$2,253 $1,128 $1,125 $4,693 $2,447 $2,246 
Other income (expense), net$(184)$(337)$153 $(692)$(28)$(664)
Amortization of intangibles - Represents the amount of amortization expense that was taken on intangibles assets held by the Company.

•Amortization expense decreased $0.7increased $0.3 million from and $0.2 million, respectively, for the three and six months ended November 30, 2021 compared to the prior year periods. The increase is due to amortization relating to the Camaro intangible asset addition of $3.9 million in the first quarter of fiscal year 2022, partially offset by assets that became fully amortized in fiscal year 2021.

Change in fair value of contingent consideration - Represents changes in contingent consideration driven by changes to estimated future payments on earn-out liabilities created through acquisitions and amortization of present value discounts on long-term contingent consideration.

•The change in the fair value offor the contingent considerationthree and six months ended November 30, 2021 is the normal amortization of the present value ofrelated to the Eximo contingent consideration.

Acquisition, restructuring and other items, net - Represents costs associated with mergers and acquisitions, restructuring expenses, legal costs that are related to litigation that is not in the ordinary course of business, legal settlements and other one-time items.

Acquisition, restructuring and other items, net, decreased by $1.0 million compared to the prior year. The decrease is primarily attributable to the following:

•Legal expense, related to litigation that is outside of the normal course of business, of $1.0 million was recorded in the third quarter of fiscal year 2021 compared to $0.6 million in the prior year.
•There was no M&A expense incurred in the third quarter of fiscal year 2021 compared to $0.2 million in the prior year.
•In the third quarter of fiscal year 2020, the Company incurred $0.8 million of expense to move manufacturing facilities as a result of the sale of the Fluid Management business.
•As part of the sale of the Fluid Management business, the Company entered into a transition services agreement with Medline Industries, Inc. ("Medline") for certain legal, human resource, tax, accounting and information technology services from the Company for a period not to exceed 24 months. As a result of the transition services agreement, the Company invoiced Medline $0.3 million in the third quarter of fiscal year 2021 compared to $0.4 million in the prior year.
•Other expenses of $0.4 million in the third quarter of fiscal year 2020 consisted of severance associated with organizational changes.

Other income (expense), net - Other expenses include interest expense, foreign currency impacts, bank fees, and amortization of deferred financing costs.

•The increase in other expense from the prior year of $0.1 million is primarily due to increased interest expense of $0.1 million for the $30.0 million outstanding on the Revolving Facility at the end of the third quarter of fiscal year 2021 compared to $15.0 million outstanding in the prior year.

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Income Tax Benefit
Three Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020
Income tax benefit$(0.6)$(0.8)
Effective tax rate including discrete items14.1 %12.6 %

Our effective tax rate including discrete items for the three-month periods ended February 28, 2021 and February 29, 2020 was 14.1% and 12.6%, respectively. In fiscal year 2021, the Company’s effective tax rate differs from the U.S. statutory rate primarily due to the impact of the valuation allowance, foreign taxes, and other non-deductible permanent items (such as non-deductible meals and entertainment, Section 162(m) excess compensation and non-deductible share-based compensation).
The estimated annual effective tax rate, however, prior to discrete items was 15.6% in the third quarter of fiscal year 2021, as compared to 12.9% for the same period in fiscal year 2020.
Results of Operations for the Nine Months Ended February 28, 2021 and February 29, 2020
For the nine months ended February 28, 2021, the Company reported a net loss of $12.1 million, or a loss of $0.32 per diluted share, on net sales of $214.2 million, compared with a net loss of $9.7 million, or a loss of $0.26 per diluted share, on net sales of $205.8 million during the prior year.
Net Sales

Net sales - Net sales are derived from the sale of products and related freight charges, less discounts, rebates and returns.

Nine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020% Change
Net Sales by Global Business Unit
       Vascular Interventions & Therapies$97,008 $90,616 7.1%
       Vascular Access76,848 70,585 8.9%
       Oncology40,312 44,624 (9.7)%
            Total$214,168 $205,825 4.1%
Net Sales by Geography
       United States$173,446 $163,381 6.2%
       International40,722 42,444 (4.1)%
           Total$214,168 $205,825 4.1%
For the nine months ended February 28, 2021, net sales increased $8.3 million to $214.2 million compared to the same period in the prior year.
Vascular Interventions & Therapies

•Total Vascular Interventions & Therapies net sales increased $6.4 million, or 7.1%. Auryon, which was acquired as part of the Eximo acquisition in the second quarter of fiscal year 2020, contributed $6.5 million in sales. Additionally, the AngioVac business grew $4.3 million as the Company continued to experience increases in case volumes in AngioVac, which increased 30% from the prior year. These increases were partially offset by lower volume in Venous products due to fewer elective procedures during the COVID-19 pandemic.
•U.S. Vascular Interventions & Therapies net sales increased $7.1 million due to increased case volume in AngioVac, increased Core Peripheral product sales and $6.5 million in sales of Auryon. These increases were partially offset by decreased sales volume in Venous.
•International Vascular Interventions & Therapies net sales decreased $0.7 million.




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Vascular Access

•Total Vascular Access net sales increased $6.3 million due to increased sales of PICCs, Midlines and Dialysis of $3.4 million, $3.1 million and $0.3 million, respectively. These increases are partially the result of a large order in the United Kingdom related to the COVID-19 pandemic for $5.2 million in the first quarter of fiscal year 2021 along with the distribution agreement with MedComp. These increases were offset by decreased sales in Ports, which declined by 1%. BioFlo product lines comprise 53% of overall Vascular Access sales compared to 51% in the prior year.
•U.S. Vascular Access net sales increased $2.5 million primarily due to increased PICCs, Midlines and Dialysis sales of $1.1 million, $1.1 million and $0.4 million, respectively.
•International Vascular Access net sales increased by $3.8 million primarily as a result of a large order in the United Kingdom related to the COVID-19 pandemic for $5.2 million. This was partially offset by decreased PICC sales in Latin America of $1.3 million.

Oncology

•Total Oncology net sales decreased $4.3 million year over year. Of this decrease, $2.1 million is due to a large NanoKnife distributor order in APAC in the prior year. There was also decreased capital and disposable sales internationally of $2.5 million due to reduced case volumes as a result of the COVID-19 pandemic.
•U.S. Oncology net sales increased by $0.4 million primarily due to increased NanoKnife disposable sales of $0.9 million, BioSentry sales of $1.0 million and Microwave disposable sales of $0.7 million. This was partially offset by decreased NanoKnife capital sales of $0.5 million and Balloon product sales of $1.2 million.

Gross Profit, Operating expenses, and Other income (expense)
Nine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020% Change
Gross profit$114,468 $120,060 (4.7)%
Gross profit % of sales53.4 %58.3 %
Research and development$27,286 $22,450 21.5 %
% of sales12.7 %10.9 %
Selling and marketing$57,486 $60,427 (4.9)%
% of sales26.8 %29.4 %
General and administrative$26,787 $29,651 (9.7)%
% of sales12.5 %14.4 %

Gross profit - Gross profit consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.

Gross profit decreased by $5.6 million compared to the prior year. The change is primarily attributable to the following:
•Sales volume positively impacted gross profit by $5.4 million year over year.
•Net productivity negatively impacted gross profit by $8.9 million primarily as a result of under absorption of $6.1 million and start-up costs of $2.8 million related to the Auryon launch. The under absorption in manufacturing operations was due to the Company maintaining staffing levels during the COVID-19 global pandemic to mitigate risk, along with a focus on working capital management through inventory reduction.
•Mix negatively impacted gross margin by $1.1 million as a result of the large order in the United Kingdom for lower gross margin products and decreased NanoKnife capital sales. This was partially offset by increased AngioVac sales.
•A reserve for recalled products of $0.5 million and amortization of prior year capitalized variances of $0.4 million negatively impacted gross margin.
•A benefit of $0.7 million was recorded as a result of the employee retention credit that the Company filed for under the provisions of the CARES Act in the third quarter of the current year.

Research and development expense - R&D expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, and manage clinical, regulatory and medical affairs.

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R&D expense increased $4.8 million compared to the prior year. The change is primarily attributable to the following:

•R&D expenses related to the AngioVac platform expansion, the NanoKnife DIRECT© study and the Pathfinder study increased $4.6 million along with $1.7 million of expenses related to Auryon.
•Outside consultant expense and other expenses decreased $0.7 million along with decreased travel expenses of $0.4 million.
•A benefit of $0.3 million was recorded as a result of the employee retention credit that the Company filed for under the provisions of the CARES Act in the third quarter of the current year.

Sales and marketing expense - S&M expense consists primarily of salaries, commissions, travel and related business expenses, attendance at medical society meetings, product promotions and marketing activities.

S&M expense decreased $2.9 million compared to the prior year. The change is primarily attributable to the following:

•Travel expenses decreased $4.0 million due to less travel as a result of the COVID-19 pandemic. In addition, tradeshow and other expenses decreased $4.3 million primarily due to the cancellation of events.
•Compensation and benefits decrease of $0.7 million due to open roles.
•Expenses related to the build-out of the Auryon sales and marketing teams to prepare for full product launch of $6.8 million.
•A benefit of $0.9 million was recorded as a result of the employee retention credit that the Company filed for under the provisions of the CARES Act in the third quarter of the current year.

General and administrative expense - G&A expense includes executive management, finance, information technology, human resources, business development, legal, and the administrative and professional costs associated with those activities.

G&A expense decreased $2.9 million compared to the prior year. The change is primarily attributable to the following:

•Legal expenses decreased $2.7 million.
•Travel expenses decreased $0.4 million due to less travel as a result of the COVID-19 pandemic.
Nine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020$ Change
Amortization of intangibles$13,838 $13,417 $421 
Change in fair value of contingent consideration$(290)$116 $(406)
Acquisition, restructuring and other items, net$3,057 $4,486 $(1,429)
Other expense, net$(417)$(739)$322 

Amortization of intangibles - Represents the amount of amortization expense that was taken on intangibles assets held by the Company.

•Amortization expense increased $0.4 million compared to the prior year as a result of the Eximo Medical and C3 Wave tip location acquisitions, which increased intangible assets by $60.3 million and $9.4 million, respectively. These additions resulted in additional amortization expense of $1.8 million. These additions were partially offset by assets that became fully amortized during fiscal year 2021.

Change in fair value of contingent consideration - Represents changes in contingent consideration driven by changes to estimated future payments on earn-out liabilities created through acquisitions and amortization of present value discounts on long-term contingent consideration.

•The change from the prior year is due to a decision to no longer pursue the final RadiaDyne technical milestone, which resulted in a reduction in the liability of $0.8 million. This reduction in the fair value was offset by normal amortization of the present value of the Eximo contingent consideration recorded in the second quarter of fiscal year 2020.

Acquisition, restructuring and other items, net - Represents costs associated with mergers and acquisitions, restructuring expenses, legal costs that are related to litigation that is not in the ordinary course of business, legal settlements and other one-time items.
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Acquisition, restructuring and other items, net, decreasedincreased by $1.4$1.1 million and $2.2 million for the three and six months ended November 30, 2021, respectively, compared to the same period in the prior year. The decreasechange from each period is primarily attributable to the following:

 to:
•Legal expense, relatedrelated to litigation that is outside of the normal course of business, of $2.9which increased $0.9 million was recorded in fiscal yearand $2.2 million, respectively, for the three and six months ended November 30, 2021 compared to $2.0 millionthe same period in the prior year.
•There was no M&A expense incurred in fiscal year, 2021 compared to $0.8 million in the prior year.
•In fiscal year 2021, the Company incurred $0.4 million of expense to move manufacturing facilities as a result of the sale of the Fluid Management business compared to $2.2 million in the prior year.
•As part of the sale of the Fluid Management business, the Company entered into a transition services agreement with Medline for certain legal, human resource, tax, accounting and information technology services from the Company for a period not to exceed 24 months. As a result of the transition services agreement, the Company invoiced Medline $1.0 million in fiscal year 2021 compared to $1.7 million in the prior year.
•Other expenses of $0.7 million consists of severance associated with organizational changes, compared to $1.2 million in the prior year.

respectively.
Other expense,income (expense), net- Other expenses include interest expense, foreign currency impacts, bank fees, and amortization of deferred financing costs.

•The decreasechange in other expense fromof $0.2 million and $0.7 million for the three and six months ended November 30, 2021 compared to the same period in the prior year, of $0.3 millionrespectively, is primarily due to unrealized foreign currency unrealized gainsfluctuations of $0.5$0.1 million and the prior year write-off of deferred financing fees associated with the old Credit Facility of $0.6 million. This was partially offset by increased interest expense of $0.3$0.8 million, for the $30.0 million outstanding on the Revolving Facility at the end of the third quarter of fiscal year 2021 compared to $15.0 million outstanding in the prior year. In addition, interest income decreased by $0.3 million.respectively.

Income Tax Benefit
Nine Months Ended
(in thousands)Feb 28, 2021Feb 29, 2020
Income tax benefit$(2.0)$(1.5)
Effective tax rate including discrete items14.4 %13.4 %

Three Months EndedSix Months Ended
(in thousands)Nov 30, 2021Nov 30, 2020Nov 30, 2021Nov 30, 2020
Income tax benefit$(0.5)$(0.9)$(2.1)$(1.5)
Effective tax rate including discrete items5.8 %17.5 %12.3 %14.5 %
Our effective tax rate including discrete items for the nine-monththree-month periods ended February 28,November 30, 2021 and February 29, 2020 was 14.4%5.8% and 13.4%17.5%, respectively. Our effective tax rate including discrete items for the six-month periods ended November 30, 2021 and 2020 was 12.3% and 14.5%, respectively. In fiscal year 2021,2022, the Company’s effective tax rate differs from the U.S. statutory rate primarily due to the impact of the valuation allowance, foreign taxes, and other non-deductible permanent items (such as non-deductible meals and entertainment, Section 162(m) excess compensation and non-deductible share-based compensation).
The estimated annual effective tax rate, however, prior to discrete items was 15.6% in the third quarter of fiscal year 2021, as compared to 12.9% for the same period in fiscal year 2020.         
Liquidity and Capital Resources
We are continuously and critically reviewingregularly review our liquidity and anticipated capital requirements in light of the significant uncertainty created by the COVID-19 global pandemic. We believe that our current cash on hand and availability under our Revolving Facility provide sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months. We are closely monitoring receivables and payables.
Our cash and cash equivalents totaled $54.5$34.3 million as of February 28,November 30, 2021, compared with $54.4$48.2 million as of May 31, 2020.2021. As of February 28,November 30, 2021 and May 31, 2020,2021, total debt outstanding related to the Revolving Facility was $30.0$25.0 million and $40.0$20.0 million, respectively. The fair value of contingent consideration liability as of February 28,November 30, 2021 and May 31, 2020,2021, was $15.4$16.5 million and $15.6$15.7 million, respectively.
The table below summarizes our cash flows:
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Nine Months EndedSix Months Ended
(in thousands)(in thousands)Feb 28, 2021Feb 29, 2020(in thousands)Nov 30, 2021Nov 30, 2020
Cash provided by (used in):Cash provided by (used in):Cash provided by (used in):
Operating activitiesOperating activities$11,894 $(18,434)Operating activities$(6,963)$6,023 
Investing activitiesInvesting activities(4,567)(61,866)Investing activities(12,941)(3,185)
Financing activitiesFinancing activities(7,541)(120,189)Financing activities6,388 481 
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents248 8 Effect of exchange rate changes on cash and cash equivalents(354)271 
Net change in cash and cash equivalentsNet change in cash and cash equivalents$34 $(200,481)Net change in cash and cash equivalents$(13,870)$3,590 
Cash flows consisted of the following:
Cash provided by (used in) operating activities
NineSix months ended February 28,November 30, 2021 and February 29, 2020:
•Net loss of $12.1$15.3 million and $9.7$8.5 million for the period ended November 30, 2021 and 2020, respectively, plus the non-cash items, primarily driven by depreciation and amortization and sharestock based compensation, along with the
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changes in working capital below, contributed to cash used in operations of $7.0 million and cash provided by operations of $11.9$6.0 million, respectively, for fiscal yearthese periods.
•For the period ended November 30, 2021, working capital was negatively impacted by decreased accounts payable, accrued liabilities and cash used in operationsother liabilities of $4.5 million, mainly driven by the payment of annual incentive compensation in the prior yearfirst quarter along with increased accounts receivable of $18.4$2.9 million.
•In fiscal year 2021, working capital was favorably impacted by decreased inventory on hand of $11.1 million. This was partially offset by increased accounts receivable of $1.8 million and decreased accounts payable and accrued liabilities of $1.7 million.
•In fiscal yearFor the period ended November 30, 2020, working capital was negatively impacted by increased inventory on handaccounts receivable of $14.0$2.3 million and decreased accounts payable, and accrued liabilities and other liabilities of $18.0$3.8 million. Accounts receivableInventory had a favorable impact on working capital as a result of the sale of the Fluid Management business.$10.5 million.
Cash used in investing activities
NineSix months ended February 28,November 30, 2021 and February 29, 2020:
•$4.62.2 million and $3.2 million, respectively, of cash was used for fixed asset additions versus $5.8 million in the prior year.additions;
•$45.87.2 million of cash was used for Auryon placement and evaluation unit additions in fiscal year 2022; and
•$3.6 million of cash was used to acquire Eximofor the QX Medical Ltd.asset acquisition in the second quarter of fiscal year 2020 and $10.0 million of cash was used to acquire the C3 wave tip location asset in the third quarter of fiscal year 2020.
Cash used in financing activities
Nine months ended February 28, 2021 and February 29, 2020:
•$10.0 million payment on the Revolving Facility in the third quarter of fiscal year 2021.
•$132.5 million repayment of long-term debt in conjunction with the new Credit Agreement that was entered into at the beginning of the first quarter of fiscal year 2020.2022.
Cash provided by financing activities
Six months ended November 30, 2021 and 2020:
•$15.05.0 million draw on the revolver in the first quarter of fiscal year 20202022 for the acquisition of the C3 Wave tip location asset.QX Medical asset acquisition; and
•$2.51.4 million and $0.5 million, respectively, of proceeds from stock option and ESPP activity versus $0.7 million in outlays in the prior year.activity.
•$1.2 million payment on earn-out liabilities in the prior year.
On June 3, 2019 and in connection with the completion of the Fluid Management divestiture, the Company repaid all amounts outstanding under its existing Credit Agreement and entered into a new Credit Agreement. The Credit Agreement provides for a $125.0 million secured Revolving Facility, which includes an uncommitted expansion feature that allows the Company to increase the total revolving commitments and/or add new tranches of term loans in an aggregate amount not to exceed $75.0 million.  The Credit Agreement includes customary representations, warranties and covenants, and acceleration, indemnity and events of default provisions, including, among other things, two financial covenants. One financial covenant requires us to maintain a fixed charge coverage ratio of not less than 1.25 to 1.00. The other financial covenant requires us to maintain a total leverage ratio of not greater than 3.00 to 1.00. The total leverage ratio is based upon our trailing twelve months total adjusted EBITDA (as defined in the Credit Agreement). The amount that we can borrow under our Credit Agreement is directly based on our leverage ratio. The interest rate on the Revolving Facility at February 28,November 30, 2021 was 1.63%1.34%. The Company was in compliance with the Credit Agreement covenants as of November 30, 2021.
On December 17, 2019,In the first quarter of fiscal year 2022, the Company made a $15.0$5.0 million draw on the Revolving Facility as part ofin conjunction with the acquisition of the C3 Wave tip locationQX Medical asset from Medical Components Inc. that is described Note 2 to the financial statements. In the fourth quarter of fiscal year 2020, the Company made an additional $25.0 million draw on the Revolving Facility.acquisition. In December 2020 a paymentand March 2021, payments of $10.0 million waseach were made on the Revolving Facility and in March 2021 another $10.0 million payment was made
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on the Revolving Facility. We believe that our current cash balance, together with cash generated from operations and access to our Revolving Facility, will provide sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months. If we seek to make acquisitions of other businesses or technologies in the future for cash, we may require external financing.
New Accounting Pronouncements
Information regarding new accounting pronouncements is included in Note 17 to our consolidated financial statements in this Quarterly Report on Form 10-Q.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Foreign Currency Exchange Rate Risk
We are exposed to market risk from changes in currency exchange rates, as well as interest rate fluctuations on our credit facility and investments that could impact our results of operations and financial position.
We transact sales in currencies other than the U.S. Dollar, particularly the Euro, British pound and Canadian dollar. For the ninesix months ended February 28,November 30, 2021, approximately 7% 7% of our sales were denominated in foreign currencies. We do not have expenses denominated in foreign currencies at the level of our sales and as a result, our profitability is exposed to currency fluctuations. When the U.S. Dollar strengthens, our sales and gross profit will be negatively impacted. In addition, we have assets and liabilities denominated in non-functional currencies which are remeasured at each reporting period, with the offset to changes presented as a component of Other (Expenses) Income. Significant non-functional balances include accounts receivable due from a sub-section of our international customers.
Interest Rate Risk
On June 3, 2019, we entered into theWe have a Credit Agreement which provides for a $125$125.0 million Revolving Facility. Interest on the facility will be based, at the Company’s option, on either a base rate of LIBOR or alternate base rate, plus an applicable margin tied to the Company’s total leverage ratio and having ranges between 0.25% and 0.75% for base rate loans and between 1.25% and 1.75% for LIBOR loans. In the event of default, the interest rate may be increased by 2.0%. As of February 28,November 30, 2021 there was $30.0$25.0 million outstanding on the Revolving Facility. The interest rate on the Revolving Facility at February 28,November 30, 2021 was 1.63%1.34%.
Concentration of Credit Risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, our credit facility and trade accounts receivable.
The Company maintains cash and cash equivalents at various institutions and performs periodic evaluations of the relative credit standings of these financial institutions to ensure their credit worthiness. In addition, the Credit Agreement is structured across five above investment grade banks. The Company has the ability to draw equally amongst the five banks which limits the concentration of credit risk of one institution.
Concentration of credit risk with respect to trade accounts receivable is limited due to the large number of customers that purchase products from the Company. No single customer represents more than 10% of total sales. The Company monitors the creditworthiness of its customers. As the Company’s standard payment terms are 30 to 90 days from invoicing, the Company does not provide any significant financing to its customers. Although the Company does not currently foresee a significant credit risk associated with the outstanding accounts receivable, repayment is dependent upon the financial stability of our customers.
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Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
As of the end of the period covered by this report, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting for the fiscal quarter ended February 28,November 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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AngioDynamics, Inc. and Subsidiaries
PART II: OTHER INFORMATION

Item 1. Legal Proceedings.
The Company is involved in various legal proceedings, including commercial, intellectual property, product liability,See Note 14 "Commitments and regulatory matters of a nature considered normal for its business. The Company accrues for amounts related to these matters if it is probable that a liability has been incurred, and an amount can be reasonably estimated. The Company discloses such matters when there is at least a reasonable possibility that a material loss may have been incurred. However, the Company cannot predict the outcome of any litigation or the potential for future litigation.
C.R. Bard, Inc. v. AngioDynamics, Inc.
On January 11, 2012, C.R. Bard, Inc. (“Bard”) filed a suitContingencies" set forth in the United States District Court of Utah claiming certain of the Company's implantable port products infringe on three U.S. patents held by Bard (US Patent Nos. 7,785,302, 7,959,615 (“615”) and 7,947,022). The case was stayed pending reexaminationnotes to our consolidated financial statements included in the US Patent and Trademark Office ("USPTO"). Following the reexamination proceedings, and the parties’ related appeals to the Federal Circuit which resulted in further proceedings at the USPTO, certain claims of the 615 patent were held invalid, while the remaining claims of the 615 patent and the other two patents were upheld over the prior art references considered in the reexamination proceedings. Thereafter, on November 16, 2020, the court granted the Company’s motion to transfer the case from the District of Utah to the United States District Court for the District of Delaware (“District of Delaware”). The parties filed a proposed scheduling order on March 12, 2021. The Company believes these claims are without merit and intends to defend them vigorously. The Company has not recorded an expense related to the outcomePart I, Item I of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.
On March 10, 2015, Bard and Bard Peripheral Vascular filed suit in the District of Delaware claiming certain of the Company's implantable port products infringeQuarterly Report on three U.S. patents held by Bard (US Patent Nos. 8,475,417, 8,545,460, 8,805,478). The case proceeded through trial which began on March 4, 2019. On day four of the jury trial, at the close of Bard’s case, the Court granted the Company's oral motion for judgment as a matter of law as well as its motions for summary judgment on the grounds that the asserted patents are invalid, ineligible, not infringed and not willfully infringed. On May 10, 2019, the Company filed a motion for attorney fees and non-taxable expenses under 35 USC Sec. 285, which remains stayed in the case. Bard appealed the judgment to the Federal Circuit and on November 10, 2020, the Federal Circuit reversed the judgment in part with respect to Section 101, and vacated and remanded the trial court’s invalidity and non-infringement judgments. The Company filed a combined Petition for rehearing and rehearing en banc on December 10, 2020, which was denied on January 15, 2021. The Federal Circuit issued its mandate on January 22, 2021. On March 15, 2021, the District of Delaware entered an order requiring the parties to submit status reports and denied as moot the Company’s motion for attorney’s fees and expenses. The matter remains pending. The Company maintains its belief that Bard’s claims are without merit. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.
On March 8, 2021, Bard filed suit in the District of Delaware asserting certain of the Company’s port products (including certain related infusion sets) infringe U.S. Patent Nos. 8,025,639, 9,603,992 and 9,603,993. The Company has not yet answered, and the matter remains pending. The Company maintains its belief that Bard’s claims are without merit. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.
AngioDynamics, Inc. v. C.R. Bard, Inc.
On May 30, 2017, the Company commenced an action in the United States District Court for the Northern District of New York entitled AngioDynamics, Inc. v. C.R. Bard, Inc. and Bard Access Systems, Inc. (“Bard”). In this action, the Company alleges that Bard has illegally tied the sales of its tip location systems to the sales of its PICCs. The Company alleges that this practice violates the federal antitrust laws and has had, and continues to have, an anti-competitive effect in the market for PICCs. The Company seeks both monetary damages and injunctive relief. Bard moved to dismiss on September 8, 2017. On August 6, 2018 the court denied Bard’s motion in its entirety. Discovery is largely complete, summary judgment, including all reply briefs, were fully briefed in October 2020, and the case will subsequently proceed to trial thereafter.
Merz North America Settlement
On May 16, 2019, Merz North America, Inc. (“Merz”) commenced an action in the United States District Court for the Southern District of New York entitled Merz North America, Inc. v. AngioDynamics, Inc. In this action, Merz alleged breach
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of contract against AngioDynamics based on a March 1, 2016 Distribution Agreement. On June 28, 2019, AngioDynamics reached a settlement with Merz. AngioDynamics made a lump-sum payment of $2.5 million to Merz in return for dismissal of the case with prejudice during the first quarter of fiscal year 2020. The case was subsequently dismissed.
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Item 1A. Risk Factors.
In addition to information set forth in this report, you should carefully consider the factors discussed in “Part I, Item 1A. Risk Factors” of our annual report on Form 10-K for our fiscal year ended May 31, 20202021 which set forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results. You should review and consider such Risk Factors in making any investment decision with respect to our securities. An investment in our securities continues to involve a high degree of risk. There have been no material changes to the risk factors previously disclosed in our annual report on Form 10-K.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table provides information with respect to the shares of the Company’s common stock repurchased during the three months ended February 28,November 30, 2021:
Issuer Purchases of Equity Securities
Total
Number of
Shares
Purchased(1)		Average
Price Paid
per Share		Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Programs (2)		Maximum
Approximate
Dollar Value
of Shares
that May Yet
Be
Purchased
Under Plans
or Programs (2)
December 1, 2020 - December 31, 2020733 $14.50 — $— 
January 1, 2021 - January 31, 2021— $— — $— 
February 1, 2021 - February 28, 20211,508 $20.42 — $— 
Total2,241 $18.48 — — 
Issuer Purchases of Equity Securities
Total
Number of
Shares
Purchased (1)		Average
Price Paid
per Share		Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Programs (2)		Maximum
Approximate
Dollar Value
of Shares
that May Yet
Be
Purchased
Under Plans
or Programs (2)
September 1, 2021 - September 30, 2021— $— — $— 
October 1, 2021 - October 31, 20212,272 $27.28 — $— 
November 1, 2021 - November 30, 2021733 $29.09 — $— 
Total3,005 $27.73 — — 
(1)These shares were purchased from employees to satisfy tax withholding requirements on the vesting of restricted shares/units from equity-based awards.
(2)These amounts are not applicable as the Company currently does not have a share repurchase program in effect.
Item 3. Defaults on Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
None.
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Item 6
EXHIBIT INDEXIncorporated by Reference
No.DescriptionFormExhibitFiling Date
10.198-K10.1February 3, 2021
10.208-K10.2February 3, 2021
31.1
31.2
32.1
32.2
101.INSThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCHXBRL Schema Document
101.CALXBRL Calculation Linkbase Documents
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Labels Linkbase Documents
101.PREXBRL Presentation Linkbase Documents
EXHIBIT INDEXIncorporated by Reference
No.DescriptionFormExhibitFiling Date
31.1
31.2
32.1
32.2
101.INSThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCHXBRL Schema Document
101.CALXBRL Calculation Linkbase Documents
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Labels Linkbase Documents
101.PREXBRL Presentation Linkbase Documents

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ANGIODYNAMICS, INC.
(Registrant)
Date:March 31, 2021January 7, 2022
/ S /    JAMES C. CLEMMER      
James C. Clemmer, President,
Chief Executive Officer
(Principal Executive Officer)
Date:March 31, 2021January 7, 2022/ S /    STEPHEN A. TROWBRIDGE 
Stephen A. Trowbridge, Executive Vice President,
Chief Financial Officer
(Principal Financial and Accounting Officer)

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