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AngioDynamics, Inc. (NASDAQ:ANGO)

March 08, 2013 8:30 am ET

Executives

Robert Jones - Senior Managing Director

Joseph M. DeVivo - Chief Executive Officer, President and Director

Mark T. Frost - Chief Financial Officer

Analysts

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

Thomas J. Gunderson - Piper Jaffray Companies, Research Division

Robert M. Goldman - CL King & Associates, Inc., Research Division

Charles Croson - Sidoti & Company, LLC

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the AngioDynamics Analyst and Investor Conference Call. [Operator Instructions] I'd now like to turn the conference over to Mr. Bob Jones. Please go ahead, sir. Mr. Jones, please go ahead, sir.

Robert Jones

Welcome, everyone. Thank you for joining us this morning on AngioDynamics' conference call to comment -- to discuss the preliminary fiscal 2013 third quarter results news release issued yesterday after the close. The news release is available on AngioDynamics' website at angiodynamics.com. A replay of this call will be archived on the company's website.

Before we get started, during the course of this conference call, the company will make projections and forward-looking statements regarding future events, including statements about revenue and earnings for fiscal 2013. We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's forms 10-Q and 10-K, which identify specific factors that may cause actual results or events to differ materially from those described in forward-looking statements. [Operator Instructions] And with that, I'd like to turn the call over to Joe DeVivo, Chief Executive Officer.

Joseph M. DeVivo

Thanks, Bob. Good morning, and thank you for joining us on the call, especially on such short notice. We want to provide our investors with the opportunity to ask questions this morning following yesterday afternoon's preliminary third quarter results and news release. We'll release actual third quarter results on April 9 and hold our normal conference call on that date, and we'll also provide guidance for the fourth fiscal quarter at that time, as we would normally do.

This morning, I'll make some brief opening remarks, then Mark Frost, our CFO, will cover the expected sales results for our 3 businesses and then I'll make closing remarks before we open up the call for questions.

Needless to say, we're disappointed with the results for the quarter that just ended. The momentum we expected to build in the second half of the year just didn't materialize, pretty much across the board. The average daily sales volume of our core product lines were flat compared to the prior quarter, so while we, like many of our peers, faced an overall challenging market that produced little if not any growth, we fell short of the ambitious sales goals we set for ourselves at the beginning of the fiscal year.

And now before Mark and I go through the detail, I do want to start off saying that we are absolutely committed to our strategy. We're committed to our growth initiatives and our team. In January, during our Analyst Day, we laid out our strategy for each of our businesses, we identified our growth drivers and as I just said, are completely committed to the future view and shape of the business. Nothing has changed. We've made very bold moves in the past to reset this company. And unfortunately, as others have predicted, it's proven to take some time to settle in and build consistency. Specifically, we felt the impact of bringing together these organizations following their -- a major acquisition in a market that showed some pretty weak fundamentals as elective procedure volumes have slowed recently, particularly in our EVLT business and our Cardiology business. EVLT has been a key and consistent grower, and during the quarter, while it grew, the pace had slowed. In our Vascular Access franchise, we operated at a competitive disadvantage as we talked every quarter about tip location. That disadvantage, we hope, goes away this summer.

This quarter, we did not build the type of momentum we expected, but we view the quarter's performance, really, as a temporary setback. It'll just take some more time to build the momentum, as we continue to onboard our new technologies, as our sales force settles in. As we integrated and innovated our business, we also ran it very well this quarter by protecting our profitability, successfully reducing costs as we've committed, which helped us offset the lower sales level, while generating cash and managing our inventory levels responsibly.

We also saw a very positive sign in our longer-term growth strategy through transformative product innovation and technology, is working and gaining traction. The quarter really masks some progress that we've made in executing that growth. We converted several very large PICC accounts to BioFlo, which now represents just a bit over 10% of our worldwide PICC sales, and that's only in 4 months. We just completed the training of AngioVac for our entire Peripheral Vascular sales force. We committed that we would get to $1 million in AngioVac revenue and in the third quarter, booked over $500,000, well ahead of our own internal expectations for that product. We recognized our first Microsulis sale in the quarter for the U.S. As it's going well internationally, we are looking forward to that product finally being in the U.S. and helping our Oncology business. And also, just as significant, we won an IDN agreement, which is a shareholder of a major GPO, that allowed us to gain a sole-sourced vascular access commitment. And consistent with the strategy in acquiring Navilyst to build scale in those product lines, the fact that they would displace the market leader due to the breadth of our product offering and the ability to meet their needs, is a significant indication that our strategy is working, and then in the future, we can deliver on this agreement and more for the company. That particular agreement is a sole-sourced agreement, as I mentioned, which will help us generate an additional $2 million worth of annual sales as we convert that business.

We remain extremely confident in our business model, our management team and our strategy to become a competitive force in this market. We're absolutely committed to delivering the value to our shareholders and are convinced that we will be successful as we build this business.

So with that, for more information and detail, I'll turn it over to Mark Frost, our Chief Financial Officer. Mark?

Mark T. Frost

Thank you, Joe, and good morning, ladies and gentlemen. I'm going to walk everyone through the major reasons for our growth shortfall and plans to improve our performance from both a geography and a product perspective.

As you can see from our release issued yesterday, we had expected to grow close to 7% to approximately $89 million within the quarter, but fell significantly short, missing by 9% or a little over $7 million. From a geography situation, we had shortfalls in both the U.S. and international, but very different business situations. Internationally, we had expected to continue to grow in the 20%-plus range, but for the first time in over 6 quarters, fell short by a little over $2 million and grew 10%, which is not terrible, but far short of our expectations. Product-wise, we saw similar reasons as the U.S. in both PV and Oncology, which I'll explain in a few minutes, but our Vascular Access business continued to grow robustly in the 14%, 15% [ph] range in international. We think our performance internationally is a bit of an anomaly and should bounce back in the future.

Now turning to U.S., expected to grow 2%, but came in 5% down, almost $5 million off our expectations, with the miss spread across all 3 product areas. The largest area was in Peripheral Vascular, with the biggest component being our EVLT offering, which was also our largest surprise. We had grown double digits in the previous quarter and expected the same result in the third quarter, but ended up slightly positive on our disposable component, which relates to procedure volumes, but overall down because of delays in closing laser capital. Our global miss was about $2 million, was about 75% in disposables and 25% in lasers. The laser capital, we do anticipate will close in the future. The lower procedure volume is an area we are diving deeper into to understand.

The other area of PV which attributed about 15% of our global miss was Fluid Management, where we anticipated to make progress and be flat with the market. We have received data that suggests cardiology procedures were down 3% to 4%, suggesting we were too optimistic on the market, where we thought procedures would be up 1% to 3%. The other issue is we continue to face strong competitive pressure from Merit, we will be more aggressive on price to ensure we limit any future competitive losses.

Now moving to Vascular Access, we did make progress in ports and dialysis and met our expectations of reducing our share erosion. Our challenge was in PICCS, which was about 20% of our global miss. This is the most frustrating part of our situation, as BioFlo has had enormous success, with over 10% of our PICCS now BioFlo-based. The issue is, because of the newness of some of our reps, as well as the lack of tip location, we are losing accounts, which offset BioFlo gains. We anticipate, as we communicated on our last call, that we should have a tip location solution by the summer. On the sales front, we clearly do see a 15% to 20% difference on average daily sales between a veteran rep and a newbie. We saw a little further attrition in quarter 3, so expect this should improve performance as we go into the next quarter.

In Oncology, our issue was primarily NanoKnife capital delays, with 20% of our global shortfall from capital not closing. Our pipeline remains strong and no deals have really dropped off. However, it appears, particularly in the U.S., the lack of an IDE, and FDA progress, is making the cycle longer to close the deal.

So with that, I'm going to turn the call back to Joe for his final comments.

Joseph M. DeVivo

So just some brief comments, and then we'll open it up for everyone. There is no doubt that we're frustrated with the quarter. We think, if anything, the expectations that we set is where our greatest frustration is, because our enthusiasm for the business and our people get masked by the fact that we got ahead of ourselves, and pretty much did what everyone told us we shouldn't do. We believe that we've absolutely made the right moves that are necessary to set the company up for success. And as I've said many times, we just to need to execute, and we didn't do that for you this quarter. I don't believe as much that there are fundamental challenges in the business. I just believe that we as a management team need to give our organization more time to solidify, execute on our strategies and set the appropriate expectations going forward. So while we didn't do it this quarter, there are so many very encouraging signs of the moves that we made. And as no one wants to hear, it's just a matter of time.

So with that, I'd love to open it up for questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question is from the line of Jayson Bedford with Raymond James.

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

Just a couple of questions here. Just on EVLT, how do you know it's procedural softness and not share losses?

Joseph M. DeVivo

Well, it's mostly our channel checks. We would pretty much know if all of a sudden, an account just flat-out stopped ordering. We definitely are -- we're in a competitive battle with Covidien and RF, but that's been going on for many, many years, and there's wins and losses on both sides. But when we looked at this quarter, we placed 72 lasers this quarter into new accounts. So we don't see it as -- I mean, we may have lost an account here and there but we've gained a lot of accounts as well. So it's based on our channel checks, based on how we look at our revenues. When we look at the procedures, we make the statement about procedures, it's across the entire customer base. We could see what the order patterns are of all our customers, and it's not representative of a share loss.

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

Okay. And then just thinking about the timing of the Analyst Day in late January, is it fair to assume that you saw a little more weakness or excessive weakness in the month of February when you look at the quarterly or the monthly cadence throughout the quarter?

Joseph M. DeVivo

Yes, the end of January was slower than we expected. But we normally have a very strong third month of quarter, so there's no indication, even though in the first half of the quarter is slower, that the second half wouldn't pick up. And even at the Analyst Day, yes, I mean, we all knew we were a little bit behind where we would want to be, but if you look at the ways that the business paces in quarters past, we normally get a pretty strong pickup in the last couple of weeks of the second month and then the third month moves, and it just didn't. So yes, I mean, we've thought of that, but no.

Jayson T. Bedford - Raymond James & Associates, Inc., Research Division

Okay. And then just the last one for me. Can you just comment on -- you mentioned some sales force turnover, some new reps. Can you just give us an idea what are the current holes in the sales force? When do you expect to fill them and when will you be operating kind of with a full team out there?

Joseph M. DeVivo

Jayson, right now, I don't -- whether it's a territory or 2, there's really no holes in the sales force today. The Peripheral Vascular organization is very stable. While there may have been a bit of attrition, it's probably less than 10% since the deal. The only attrition that we saw, which was above market -- I mean, most organizations look at 10% to 20% attrition as normal on an annual basis, and we saw upwards of 40% in the Vascular Access business. And that's been a business of a lot of change and turmoil ever since the transaction, whether it's basically the wait of not having a tip location solution and you lose an account and the rep gets frustrated. So we've seen the turnover there. Now we have a lot of great new people in place, but it takes time for them to establish themselves and to build up their relationships. Now in Oncology, it's very stable. So we really only point to the turnover we saw in Vascular Access, but we've done a pretty good job in turning the organization around. It's just that you can pretty clearly see, when we look at the progress of sales in that organization, 10-year reps don't have the same type of -- ROI as far off of plan as newer reps, which is to be expected. But we like the people we've hired. It's just that it'll take them some more time. But that attrition, I think, is more of a cause than effect of the structural issues that we dealt with. And at the same time, having BioFlo in the bag has also created a significant amount of positive energy in that -- in the sales force with the type of wins we're getting. So one number doesn't tell the story of that business. Looking under the covers, you'd see a lot of wins, a lot of losses, a lot of churn and a lot of energy going on, and it's just a matter of time before we close the holes in the buckets, and the wins we get, we keep.

Operator

And our next question is from the line of Charles Haff with Craig-Hallum.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

First on NanoKnife. It seemed to me that there was maybe a reduced focus recently on NanoKnife relative to prior periods. Do you think my perception is accurate? And if so, could that have impacted NanoKnife this quarter from a purchasing side?

Joseph M. DeVivo

Well, when you mean focus, you mean focus on a sales and marketing side?

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

Yes.

Joseph M. DeVivo

No, I don't think there's a reduced focus on it. We have the same people, same energy around it. It's a product line that we're very hamstrung. We don't sell the product off label. Our team doesn't go in and talk about the specific procedures because we can't. What we do, do is support our existing accounts, and if we're asked on things, we'll provide the publicly available information. I do think that not having an IDE has -- is getting into some accounts where, if a thought leader who is looking to bring the product in, specifically talks about what the procedure is, and as it gets reviewed, we're looking for a $250,000 commitment. I do think not having the IDE in place is definitely a leaking into the marketplace and creating some concerns, which is not to be expected. But that said, as I said, last quarter, we didn't hit the NanoKnife capital sales that we expected. And then after the quarter close, we closed some deals, and the same thing happened again this quarter. And I think our ability to predict the pipeline, I think is taking a little bit longer to close, and it's been a little bit less predictable.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

Okay. And my second question is regarding the distribution agreement for tip location. Can you talk about or give us an update on that, and kind of what your -- if you have revised expectations there?

Joseph M. DeVivo

No, nothing new. When our partner receives their clearance, we will make an announcement.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

Okay. And when do you expect that to be?

Joseph M. DeVivo

We had originally said that we had hoped to be marketing the product in the first quarter. I don't think we are coming off that date. But if it changes, we'll let you know.

Operator

And our next question is from the line of Tom Gunderson with Piper Jaffray.

Thomas J. Gunderson - Piper Jaffray Companies, Research Division

Joe, maybe you could talk, to the extent you know in early March, a little bit about the differences of things that were particular to AngioDynamics and those that were market. In particular, I'm looking at comments that have been made here on the EVLT side with the soft procedures, and then also, soft procedures on -- in the -- affecting Fluid Management. Can you tease that out a little bit, maybe between December and January, February? Because we've been seeing insurance impact in the first calendar quarter, where people get sticker shock and delay seeing the doctor, and that, we've been inputting that, I think most of us, in our models, across the board for a while. Are you seeing any of that exacerbated? Or maybe just a little color on that.

Joseph M. DeVivo

Tom, we're not one of the big bellwethers, and we've historically not been one that has, I guess, enough critical mass to predict over -- general market trends. All I can say is, we know our business, and our people have been just very surprised with the day-to-day weakness of our elective procedures, and EVLT is the largest one, but we have others. And our channel checks, the first thing you think of is as Jayson said, did you lose share? And so it's very easy for us to call a rep, talk about an account and they'll say, "No." and I've had many conversations with very high-volume accounts who have just simply said, "We're not getting the calls. It's way off." But it is not -- it would take more time to come up with a complete interrogation of all of our accounts. But we've channeled -- as the quarter goes on, you start -- as procedures roll in, you start asking your reps, "What's going on?" Again, "Are you losing business?" And they said, "No, we're not losing business." And we didn't have any major type of loading in the second quarter that would have eaten into the third. So I think, from the best of our knowledge, we would believe that, especially on EVLT and in Cardiology, that -- and I think there are probably 2 totally different reasons, but in those areas, we have, through our checks, seen a weakness in procedures. Now, EVLT is very fickle. EVLT is, if it's really hot in the summer, the patients don't want to go wear those stockings, and it's also very elective and I do think it's a function of the economy for that particular procedure. And I think it's a mistake when, we tried to be transparent this year and say, "We think this business will grow at X," but it's not consistent quarter-to-quarter. And actually, this upcoming quarter is usually the strongest EVLT quarter, when weather starts to get a little warmer and whatnot. So we'll see how things accelerate in the second quarter with EVLT. But if you sat and talked to our marketing, our salespeople who are real close to this business, they would tell you that elective procedures are down.

Thomas J. Gunderson - Piper Jaffray Companies, Research Division

Got it. And then on the 40% turnover on Vascular Access business, you -- on the sales side, you commented on the disappointment of losing an account because of tip location, I get that. But usually, I mean, our view is sales guys leave because of comp, and that often happens when there's a switch in ownership. Did comp change January 1 or beginning of the quarter, such that old guys just said, "Wait a second, I'm not sticking around for this"?

Joseph M. DeVivo

Well, I mean, the target comp and everything didn't change. But what did change is -- where we saw the most attrition, what we did, Tom, when we did the integration is we took the legacy Navilyst sales force, 45 people, and we gave them all the Vascular Access products from Angio and they become the Vascular Access sales force. And in the first half of the integration, we lost a lot of legacy Navilyst people, whether they didn't want to work for their competitor, they didn't want to be a part of Angio, you can ask -- I guess, hopefully, we can ask them. But we did lose some people early on. Then, as -- in the first quarter, we didn't hit our expectations with that, they didn't hit their quotas, we didn't have a safety net for them in the very beginning, and some people got frustrated with fact that, "Hey, a lot of turmoil, I didn't make my money." So we saw some people leave because of that. We've since, for the second, third and fourth quarters, put a safety net out. We don't have any type of concerns this quarter, because we had a minimum threshold of income for all of our sellers to protect them, because we're still in a lot of fluctuation. But the truth is, is I think the attrition's behind us, but it was 40% of the organization since June 1 and that's purely Vascular Access. I believe a lot of new people in their territories, and I don't -- unless -- if we turn around and say we're not going to have a tip location device in 2 years, all right, then we probably would have some more attrition. But the BioFlo part of the business is real. And the more credibility you build in the marketplace, the more it will stem those losses, and it's just a matter of time. But I hope I answered your question.

Thomas J. Gunderson - Piper Jaffray Companies, Research Division

You did.

Operator

And our next question is from the line of Robert Goldman with CL King.

Robert M. Goldman - CL King & Associates, Inc., Research Division

A couple of questions, Joe and Mark, on the balance sheet and cash flow. Could you give us an estimate of what your cash balance will be or was at the end of the third quarter, and what you expect it to be at the end of the year? What the free cash flow was in the third quarter, and what shall expected to be for the whole of the year? And if you see a need for cash at AngioDynamics, that is to say, a cash raise, and if so, if your bias would be debt or equity? And finally, if there are any issues we should be aware of on any debt covenants?

Mark T. Frost

Sure, Bob. I can't give you a lot of specifics. What I can tell you is, Joe sort of alluded to this, we did start seeing some issues early in the quarter, so Finance is working very tightly with the operations guys to ensure we manage the factories well and we hit other cash pulse points. So we don't anticipate we're going to be significantly off our cash and EBITDA numbers. We don't have exact numbers, we probably won't -- we'll communicate those on the call. But we're feeling pretty comfortable, as you can see, from the adjusted EPS, that we're going to be able to offset a significant portion of the gross margin miss, and therefore, cash should be in a good place. So therefore, we have no liquidity concerns, I don't think we're going to have any issues with covenants. Bob, we'll talk about guidance and cash flow and all of that on our next call, so it's too early. We're still in the middle of finalizing our forecasted guidance, and we'll have that on the April 9 call and provide that level of detail.

Robert M. Goldman - CL King & Associates, Inc., Research Division

And if I can, as a follow-up, Mark, since you're not, today, making any change in the cash flow guidance, just remind us what your most recent public cash flow guidance for the fiscal year has been?

Mark T. Frost

Yes, I think on the last call, we said, I think we generated about $11 million of operating cash, $9 million free cash. We said on the last call, we should be able to improve that both in third and fourth quarter. And I think that was the basis of what we said the last call.

Joseph M. DeVivo

Before we go to the next question, I'd like to be absolutely clear, just to reinforce what Mark said. Normally, if you have a big miss, you'd see the plants building some forecast, you have a lot of cash put into inventory and you'd have cash issues. We do not have that. You'll see, when we get to -- you know, the problem, we don't -- we can't give you exact numbers, because it's 5 days, 6 days after the close of the quarter, and we're still finalizing numbers and it takes a little bit of time, but we'll have close to the cash objectives as we set ourselves for the third quarter. Our cash balance will be going up. We're a very strong cash company, and there's absolutely no issue. We know that we have debt, we know we have covenants and we manage our business very tightly, and we will be building our cash balance and that is not of an issue to be concerned about.

Operator

And our next question is from the line of Charles Croson with Sidoti & Company.

Charles Croson - Sidoti & Company, LLC

I know you guys aren't giving out guidance today, but can you kind of give us a little bit direction on what you expect for the next couple of quarters, given the weakness in procedure volumes? And you said that there's not really any more sales attrition there, but it sounds like you still need to get some of these guys up to speed. So I guess directionally, that'd be a little bit helpful in terms of adjusting our models this morning.

Mark T. Frost

Sure, I'll answer it. In view of some of the procedure and market issues, our expectation is, we will likely continue close to what's happened in third quarter, with a couple important caveats. In fourth quarter, we have 4 more selling days, we usually sell $1 million to $1.2 million a day, because it's a highly disposable-oriented business. We also, as Joe talked about, are having a lot of success with our growth drivers, so we do expect to improve on the performance on AngioVac, we do expect to get a decent contribution from our Microsulis acquisition and we expect BioFlo continue to have some success. But obviously, we talked about some of that being offset. And then sort of the wildcard is international a little bit, whether we're able to fully bounce back to 20%. I think we have to see whether it's a full bounce back, but we do expect to do a little better than the 10% we had in international. So that's sort of a rough guideline on what we would expect for the fourth quarter. And clearly, we're going to have a lot more detail on the April 9 call.

Charles Croson - Sidoti & Company, LLC

Okay, Mark, I appreciate that. And then Joe, you had talked about trouble in the NanoKnife because of the IDE. What further progress have you made with that in the quarter? And do you have any sense of when that might -- when you might ultimately get that?

Joseph M. DeVivo

Right at the time of the Analyst Day, a part of -- actually the next day, our team was with the FDA. We had a very positive meeting, I would believe. And the FDA gave us some clear -- they gave us some clear line of sight as to what they see -- want to see from us in order to move forward. So we're working on it. I think we have a good -- much better regulatory clinical team than we've ever had, we're digging out of some things that we've done in the past and the type of preclinical work and work that they want to see, we're doing. So I've tried to take the expectations from a timeline out, because it's really variable until the conversation between both FDA and ourselves come to fruition. But there's no lack of energy, there's no lack of focus. We're just taking our time to do it right. So we maintain our focus on trying to get that, the pancreas IDE. We did comment, during the Analyst Day, Charles, that internationally, we're seeing a renewed interest in prostate. Actually, several of the NanoKnifes this quarter were actually sold to urologists. There's a growing trend in prostate away from radical prostatectomy and looking at more earlier intervention of focal therapy. And just a reminder, everyone and yourself, NanoKnife has a characteristic of affecting, let's say, normal cells but not vascular and nerve bundles. And so while the technology was originally developed for the prostate application, we said to ourselves the greatest unmet need is in the pancreas and to focus our time and attention there, which has proven to be a very high bar, given the lack of other therapies for the prostate or for the pancreas. So while we maintain our clear focus on getting our IDE for pancreas in the U.S., we are seeing a revitalized interest in prostate. We are selling, actually systems, and procedures are being done around the world, focal prostate ablation, and I actually think that, that might be a little bit more energy around that than we expected. So I hope that helps.

Charles Croson - Sidoti & Company, LLC

I appreciate that. One last question here and then I'll hop off. How was pricing during the quarter, if you guys know?

Joseph M. DeVivo

It's too early, we haven't rolled up all the numbers yet. It was, I think, it was flat last quarter.

Mark T. Frost

Flat to 1% down.

Joseph M. DeVivo

But we'll have, in April 9, all of our -- we'll have the opportunity of having all the numbers roll in. We'll share them with you as we normally do. Again, we're just a week out, we see raw sales data, we see some of the overall metrics, but we want to have some audited numbers to be able to share with you.

Operator

[Operator Instructions] Our next question is a follow-up from Charles Haff with Craig-Hallum.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

Mark, I was wondering if you could give us an update on the ERP system conversion post the Navilyst integration. Where are you at on that, and has the timing changed at all?

Mark T. Frost

Yes, we're hip deep into it. The plan right now still is a June 1. We have a couple of major reviews coming up, so we'll have a lot more color by the April 9 call. But right now, it's still on plan.

Charles Haff - Craig-Hallum Capital Group LLC, Research Division

And does that present any challenges right now, given all the puts and takes that are going on in the business, doing the conversion? Or do you feel like you have solid visibility, even with the ERP conversion?

Mark T. Frost

We do. There's a lot more manual effort. But we've been doing this since day 1. So, there's a lot more reconciliation, manual effort to make sure we have all the numbers, which is why it takes a little longer and we can't provide some the details you guys are asking for. Once -- the hope is once we're on one system, we can get data a lot more faster. But it's just a lot more effort, a lot more effort by everyone to get the numbers, unfortunately.

Operator

And I'm showing there are no further questions. I'll turn the call back to Mr. DeVivo for closing remarks.

Joseph M. DeVivo

Okay, everyone. Thank you very much for taking the time this morning to get on the call. As a management team, we're very committed to everything that we've said. We're disappointed that we had the trifecta here with each of the businesses, even international, for this first quarter slowing down. But we will get this business to grow and we will deliver on our commitments. We most certainly are ahead of ourselves for the second half of the year. We have not hit the growth targets we had expected. But it is just a matter of time. If you sat with our -- I spent the last week with my sales managers, with my sales and marketing team, with our people internally, there's a broad-based commitment that we are on the right path, that we're excited about our future, that the new growth drivers really substantially improve our value strategically, and it's just time. And I know our investors don't want to hear it's going to take longer and we don't want to be able to tell you that, but we need also to deal with the reality. So we appreciate your patience and look forward to future reporting of our progress. Thank you.

Operator

Ladies and gentlemen, this does conclude our conference for today. We thank you for your participation. You may now disconnect.

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Source: AngioDynamics' CEO Hosts Analyst and Investor Conference (Transcript)
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