Good morning, and welcome to the AngioDynamics Fourth Quarter and Fiscal Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference call is being recorded.

The news release detailing our fourth quarter and fiscal year 2021 results crossed the wire earlier this morning and is available on the Company's website.

This conference call is also being broadcast live over the internet at the Investors section of the Company's website at www.angiodynamics.com, and the webcast replay of the call will be available at the same time -- same site shortly after of today's Investor and Technology Day presentation which will begin at 9:30 AM Eastern Time.

Before we begin, I'd like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings and gross margins for fiscal year 2022 as well as trends that may continue.

Management encourages you to review the Company's past and future filings with the SEC, including without limitation, the Company's Forms 10-Q and 10-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

The Company will also discuss certain non-GAAP financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the Company's business over time.

Investors should consider these non-GAAP measures in addition to not as a substitute for or as superior to financial reporting measures prepared in accordance with GAAP. A slide package offering insight into the Company's financial results is also available on the Investors section of the Company's website under Events and Presentations.

This presentation should be read in conjunction with the press release discussing the Company's operating results and financial performance during this morning's conference call. I'd now like to turn the call over to Jim Clemmer, AngioDynamics' President and Chief Executive Officer. Mr.

Clemmer?.

Thank you, Rob and good morning, everyone, and thank you for joining us today for AngioDynamics' fiscal 2021 fourth quarter earnings call.

Joining me on today's call is Steve Trowbridge, AngioDynamics' Executive Vice President and Chief Financial Officer, who will provide a detailed analysis of our fourth quarter and full year financial performance and our FY '22 guidance. Fiscal 2021 was a unique year that presented a number of external challenges.

And I could not be more proud of the entire AngioDynamics team for their continued demonstration of perseverance, passion, dedication, and performance. During the year that was continually disrupted by the COVID-19 pandemic, we made significant progress in our transformation into a customer-focused, technology-driven, growth-oriented company.

From the onset of the COVID-19 pandemic, we were determined to maintain our focus on disciplined investments in our people and the technologies that will drive revenue growth for our company in large, fast growing highly-profitable markets.

Despite the disruption from COVID-19, we ended FY '21 with more people employed in the AngioDynamics family than we had pre-COVID. During the year, we initiated and executed our strategic research and development and sales and marketing investments in our growth platforms.

These investments drove growth in FY '21 and are poised to facilitate accelerating top line growth into FY '22 and beyond.

Before I get into our performance, I'd like to remind you that year-over-year comparisons of our results are significantly impacted by the COVID-19 pandemic, particularly the acute disruption that occurred during our fourth quarter of FY '20.

As a result, this morning, I'll also be referring to sequential growth of our fiscal third quarter as we believe this is a more accurate indicator of the current momentum in our business.

Additionally, as you'll hear more about during our Investor and Technology Day later this morning, going forward we will be referring to our key growth platforms Auryon, Mechanical Thrombectomy, and NanoKnife as our Med Tech businesses and the remainder of our portfolio as our Med Device businesses.

With that in mind, strong performance from our Med Tech platforms as well as our more mature Med Tech businesses drove solid fourth quarter and full year results. We ended FY '21 with full year revenue of $291 million, representing growth of 10.2% year-over-year.

We completed our fourth quarter with revenue of $76.8 million, representing sequential growth of 8% over the third quarter reflecting the momentum we are building as we head into FY '22.

I'm encouraged by the continued improvements in our end markets and believe our results demonstrate that we are well-positioned to drive further adoption of our differentiated platforms as procedural volumes normalize coming out of the COVID pandemic.

We broke even on an adjusted EPS basis during the quarter as we prioritize certain strategic investments in research and development and sales and marketing, including investments in preparation for our anticipated launch of the AlphaVac Mechanical Thrombectomy System, while continuing to balance near-term cash and expense management.

For FY '21, we generated $0.05 of adjusted EPS as we made purposeful and strategic investments throughout the year in research and development and sales and marketing, focused on supporting our Med Tech platforms and generating future growth.

Diving deeper into our performance in the quarter, the positive trend within our Auryon business continued into the fourth quarter with revenue of $4.6 million bringing total FY ‘21 Auryon revenue to $11.1 million. Auryon continued its sequential growth as well coming off $3.3 million of revenue in the fiscal third quarter.

For FY '22, we expect Auryon to continue to grow meaningfully and generate revenue in the range of $18 million to $22 million. We continue to see strong growth from our AngioVac platform as evidenced by the record number of procedures performed in both fiscal 4Q '21 and for the full year.

AngioVac platform revenue increased 14% sequentially in the fourth quarter with year-over-year growth of 47% in FY '21. Additionally, we are thrilled about the recent 510(k) clearance of AlphaVac, our new multipurpose mechanical thrombectomy device.

This device expands the breadth of our AngioVac platform and will allow us to serve a much larger segment of the venous thromboembolism market, which we will discuss in more detail during our Investor and Technology Day later this morning.

We also believe that our current on-circuit AngioVac system will continue to drive strong growth in the complex, right atrium focused market.

Together, AngioVac and AlphaVac comprise our mechanical thrombectomy platform, which we anticipate will grow approximately 30% year-over-year in FY '22, inclusive of AlphaVac revenue following its anticipated launch toward the end of calendar year 2021.

NanoKnife probe sales were strong in the fourth quarter, growing 14% sequentially worldwide and 19% sequentially in the United States. As anticipated, capital sales in the quarter declined 77% year-over-year as we're coming off a strong prior year quarter due to the launch of our NanoKnife 3.0 generator as well as a challenging capital environment.

NanoKnife probe sales for FY '21 grew 13% year-over-year worldwide and 38% in the U.S. The continued positive momentum in the U.S is a direct result of two main drivers. First, our increased capital base that we established last year; and second, increased awareness fostered by the DIRECT study.

We remain focused on investing in the NanoKnife platform as we progress toward expanding potential for new indications and improving OUS environment in the future. We anticipate continued strong probe sales growth in FY '22.

On the internal R&D investment front, we continued to strategically invest in growth initiatives during the fourth quarter as we supported our Med Tech platforms already in the market as well as products in our development pipeline.

It's worth noting that over the past three years, we have grown R&D spend at a greater than 10% CAGR and are now starting to clearly see the results of that investment. Throughout FY '22, we plan to continue to strategically invest and to further advance our current portfolio and expand into larger, faster growing addressable markets.

M&A remained on the back burner during the fourth quarter as we continue to focus on balancing growth and profitability in the face of COVID-related challenges. However, strategic and tuck-in M&A remains a key piece of our long-term growth strategy, and we continuously monitor the landscape for these opportunities.

In the near-term, we anticipate maintaining our disciplined approach to capital allocation and expense management. Turning to our clinical progress. Subsequent to the end of the fiscal year, we received approval from the FDA for our 100 patient NanoKnife prostate IDE study, PRESERVE.

We're excited to begin this study as we seek to prove the clinical benefits of NanoKnife for patients suffering from prostate cancer and look forward to updating you on our progress as we pursue this expanded indication.

Consistent with where we were at the end of our fiscal third quarter, we currently have 26 active sites in our DIRECT study and are encouraged by the overall execution of the study in the current environment.

With that, I'd like to turn the call over to Steve Trowbridge, our Executive Vice President and Chief Financial Officer to review the quarter in more detail.

Steve?.

Thanks, Jim, and good morning, everyone. Before I begin, I'd like to point you to the presentation on our Investor Relations website summarizing the key items associated with our quarterly results.

As Jim mentioned, our year-over-year comparisons for our FY '21, particularly our fourth quarter results are significantly impacted by the COVID-19 pandemic related disruption. Our net sales for the fourth quarter of FY '21 increased 31.7% year-over-year to $76.8 million.

Our growth was driven by continued sequential growth in our Auryon Atherectomy business, strong AngioVac performance, NanoKnife Probe growth and solid performance from our Med Device businesses.

During the fourth quarter, we saw continued sequential improvements in case volumes, and we are encouraged that we're trending towards a more normalized run rate as we enter fiscal 2022. Our total endovascular therapies business, which was formerly named our VIT business, increased 72.3% year-over-year to $38.1 million.

This increase was driven by the greater impact of COVID-19 on the prior year period and the continued strength of two important growth products, AngioVac, which grew 108% year-over-year and Auryon.

Auryon contributed $4.6 million in revenue during the fourth quarter, building upon the momentum that we saw following the products official commercial launch in the second quarter and strong performance in the third quarter. Total fiscal year 2021 revenue for Auryon was $11.1 million.

Auryon remains a key growth driver as we continue to invest in the platform, build out our commercial infrastructure and generate clinical evidence. As Jim mentioned, for FY '22, we expect Auryon to generate revenue in the range of $18 million to $22 million.

Vascular Access revenue increased 3.2% versus the prior year period, driven by growth in Ports, which offset a decline in PICCs. As we previously discussed, the fourth quarter of FY '20 included approximately $1 million of sales related to a one-time order from NHS through our distribution partner.

Additionally, PICCs and Midlines were two of the few product groups that did not suffer significant disruption during our fourth quarter of FY '20 due to COVID. Hence the lower year-over-year growth relative to our other businesses.

Revenue from our Oncology business increased 14.2% during the quarter as compared to prior year, driven by a 42% year-over-year increase in NanoKnife Disposable sales as well as strong results in both BioSentry and Microwave disposables.

Oncology revenue growth was partially offset by the tough comp and continued weakness in capital end markets as well as a challenging APAC region were many of our businesses continue to be impacted by the COVID-19 pandemic.

Moving down the income statement, our gross margin for the fourth quarter of FY '21 was 55.1%, an increase of 330 basis points compared to a year-ago and an increase of 100 basis points sequentially from our third fiscal quarter. The improvement was largely due to sales mix.

Though this was partially offset by continued staffing pressures and anticipated Auryon startup costs. We continue to reduce inventory during the fourth quarter, ending at $48.6 million.

We do expect that gross margin will expand over time as we continue to execute on our strategy of driving growth in our high tech, high margin platforms of Auryon, Mechanical Thrombectomy and NanoKnife.

However, during the back half of FY '21, a number of external pressures resulted in gross margin headwinds that we anticipate could extend through the next several quarters.

Many companies have discussed staffing challenges during the first half of calendar year 2021 and we have faced and continued to face challenges in fully staffing our Queensbury, New York facility. This tight labor market has resulted in higher labor and manufacturing costs.

In addition, we've experienced significant freight cost pressures and we've observed what we believe to be the beginning of raw material inflationary pressures. We have a talented and dedicated operations team that is focused on labor and service efficiency, material pricing opportunities and make-versus-buy analysis.

However, the external factors I mentioned and the Auryon pricing dynamics stemming from the increased OBL mix that we previously discussed, will impact the pace at which our sales mix drives gross margin leverage through FY '22. The net result is that for FY '22, we expect gross margin of approximately 55%.

Our research and development expense during the fourth quarter of FY '21 was $9.1 million, or 11.8% of sales compared to $7.2 million, or 12.4% of sales a year-ago. We continue our strategy of disciplined investment in R&D focused on driving our key technology platforms. For the fiscal year, R&D expense was $36.4 million or 12.5% of sales.

For fiscal year 2022, we anticipate R&D spend to similarly target 10% to 13% of sales. SG&A expense for the fourth quarter of FY '21 increased to $33 million, representing 42.9% of sales compared to $26.4 million representing 45.3% of sales a year-ago. For the fiscal year, SG&A expense was $117.2 million or 40.3% of sales.

We're pleased with our ability to control general, administrative spending amid COVID related disruptions and remain committed to disciplined expense management and managing our cash, while investing in our key technology platforms, including investments in our sales organizations.

Accordingly, we anticipate FY '22 SG&A spending to approximate 40% to 45% of revenue. As we previously mentioned, SG&A spend in FY '21 was positively impacted by reduced travel associated with the ongoing COVID-19 pandemic.

We do expect travel costs along with our ongoing investments in our sales organizations to increase in FY '22 as the global environment improves and restrictions ease.

Our adjusted net loss for the fourth quarter of FY '21 was $100,000 or breakeven on a per share basis compared to an adjusted net loss of $2.1 million or $0.06 per share in the fourth quarter of last year.

For the fiscal year, adjusted net income was $1.9 million or income of $0.05 per share compared to adjusted net income of $3.5 million or $0.09 per share a year-ago. And as a reminder, our third quarter of FY '21 included a benefit from the CARES Act.

Adjusted EBITDA in the fourth quarter of FY '21 was $4.5 million, compared to $0.6 million in the fourth quarter of FY '20. For the fiscal year, adjusted EBITDA was $19.5 million compared to $18 million in fiscal 2020.

Turning to our balance sheet, we began the quarter with roughly $54.5 million in cash and cash equivalents and we generated free cash flow of $3.1 million. At May 31, 2021, we had $48.2 million in cash and cash equivalents and $20 million in debt outstanding, having repaid $10 million of our outstanding debt during the fiscal fourth quarter.

Turning now to guidance. We anticipate that FY '22 net sales will be in the range of $305 million to $310 million and full year adjusted earnings per share will be in the range of $0.00 to $0.05 as we continue to invest in research and development and sales and marketing for our key Med Tech platforms.

Our guidance range contemplates top line growth of 5% to 7% over FY '21, which included approximately $5 million of revenue related to that one time sale to the NHS through our distribution partner. We look forward to providing you with our longer term financial outlook as part of our Investor and Technology Day later this morning.

With that, I'll turn it back to Jim..

Thanks, Steve. I'd like to again say thank you to all the members of the AngioDynamics team for their continued hard work and dedication to our mission.

I am very pleased with the progress we have made with our three key technology platforms, AngioVac, Auryon and NanoKnife, including the recent 510(k) clearance of the AlphaVac Mechanical Thrombectomy System. We view this as the first step in our market expansion strategy as we continue to make focused investments in larger high growth markets.

I am excited to discuss these and other parts of our portfolio at our Investor and Technology Day presentation, which will kick off at 9:30 Eastern this morning. With that, I'd like to turn the call back to the operator and open the line for questions.

Rob?.

[Operator Instructions] Thank you. Thank you. And our first question is coming from the line of Matthew Mishan with KeyBanc. Please proceed with your questions..

Great, and thank you for taking the questions guys, and congratulations on the revenue momentum here.

I think first for me, could you give us a sense of the type of procedures that Auryon is sequentially growing in?.

Hi, Matt. Good morning. It’s Jim. Matt, we will give more detail later, but we are really seeing a blend of above and below the knee, where initially we thought that our users will be more comfortable with the above the knee procedures as I think the other laser that’s been in the market is used more in that phase.

So, I think users initially started with above the knee, Matt. Now, we are seeing a trend where they are getting very confident in our technology. They are taking it below the knee through what is usually more challenging procedures, and there is just probably one of the other companies that do that well.

So I think we’re now becoming a really key and trusted partner in that. So we are seeing our blend really go closer to a 50-50 split, above and below the knee.

What we are also seeing, Matt too is, as we’ve said earlier, more than we expected in the OBLs, I think part of that is due to the COVID effect where a lot of the care is delivered in the past year in the OBLs. I think we will see a blend getting back to where hospital OBL mix, little more favorable over the course of this coming fiscal year..

And then, Jim, as you’ve seen that sequential improvement that has been fairly linear at this point.

How many of those -- is there a way to parse out how many of those sales are increases in the installed base and original orders versus you’ve already installed the Auryon device, 2, 3 quarters ago, you’ve gotten through the initial orders and now you are starting to see the sites increase the revenue -- increase procedure per site..

So, you hit the nail on the head, Matt. We are measuring all of those effects. So, exactly what you asked is a way we’re measuring this. Again, this is really a start up business within a mature operating company. We wanted to be really careful as we took on this marketplace.

So, our initial moves as you know is supply -- getting our supply chain robust, make sure we get the quality we need on our hardware, first, the capital; and second on our disposable catheters. So right now, Matt, we are doing everything you said.

Every time we place a new laser -- and now we’ve a good trend, we know how long it takes for users to get confident, comfortable with the device. We can expect the catheter usage to increase on a monthly basis. So, we are measuring the metrics you gave us plus about half a dozen more.

As we get this business off the ground, we are really pleased with how the business has started, we’ve got really great people in the field supporting our users.

But, Matt, the metrics you mentioned and a bunch of more, we are going to measure diligently and we will report back to you, kind of where you would like to see over time as we expect this to be a growth driver for a long time for us..

Okay. And I think people generally understand the start up costs associated with this, and in fact you have to build inventory before you launch.

How should we think about -- if we think about the mix of Auryon revenue versus the Company average gross margin as you get to scale?.

Yes, Steve, if you can comment?.

Yes, as we get to scale, Matt, we certainly expect Auryon standard margin to be accretive to overall corporate margins. As you mentioned, we’ve those start up costs and they are going to impact the margin profile of that business initially.

But as we were exiting Q4, we were really pleased with the trajectory that we were on and we expect as we head into '22 and certainly beyond that, that the overall margin profile that Auryon is giving us is going to be accretive to overall corporate margins..

And last question on AngioVac. Comps are a little wacky this quarter for you, given what occurred last year.

But if you look at a 2-year stacked basis, it does look like you’re seeing an acceleration of growth in AngioVac, and kind of what do you think is driving that?.

So, a couple of things. If you remember, in fall of 2019, at the end of the calendar year 2019, we launched our AngioVac 3.0, which we really incorporate a lot of user feedback into that design and development of that launch. So we’ve got good momentum right as we launched it, then the pandemic hit in March.

But we are confident, two things are happening, Matt. We have new users using the product that didn’t use the old version. And then second, users using the product are now trying it in more and more cases as they gain confidence in the great outcomes they are seeing. So it’s a blend of both.

So our job again is to keep talking about why this technology is very different than everything in the market, getting users comfortable and confident to try it. And once they try it, we think the results are speaking for themselves and they are getting confidence in using it more often.

So it’s really a combination of both, new users and the same users using it more often..

Great [ph]..

And the one thing I would add to that, Matt, is, as you will see more through our Investor Day presentation this morning, we are really excited about the upcoming AlphaVac launch, and what you will see is that those two products AlphaVac and AngioVac are really complementary.

So we are going after the overall DVT market for mechanical thrombectomy, but we feel both of those products have a role to play, and so we are not expecting significant cannibalization to come from the AngioVac side once we launch AlphaVac.

And so we think that there is great runway with the AngioVac as you have continued to see and as you pointed out earlier in your question, and then we expect that to be incremental with AlphaVac, once we launch that towards the back half of this calendar year..

Okay, great. Look forward to Part 2 at 9:30..

Thanks, Matt..

Thank you. Our next question comes from the line of Jayson Bedford with Raymond James. Please proceed with your questions..

Good morning. Just I guess a few questions. Just given your quirky [ph] fiscal year end, there’s always I think attention on the intra-quarter trends.

Wondering, if you could just comment on trends in April and May?.

Hi, Jason. As you know, we were measuring kind of same-store sales as we’ve talked to our investors about during the course of the year and we’re watching those trends get better, closer to normal during the course of the year. And as we looked at the timeline you gave, the April, May, we’re closer, but that’s when last year we had a fall off as well.

So, it’s really tricky. What we’ve held, Jayson, between the metrics, we’ve hard metrics inside and just gut feel from our sales reps talking to customers. We are not back to what we would assume is a normal operating environment.

We are as close as it’s been in the last 6 months or so, but we still feel there is not 100% alignment, where we would call a normal treatment occurring..

Okay.

In terms of fiscal '22, what’s embedded in the guidance for segment growth between your Endovascular, Vascular Access, and Oncology business?.

Yes. So, Jayson, as Jim mentioned, what we wanted to focus on when we gave the revenue guidance, so we are guiding $305 million to $310 million for FY '22.

You’re going to see $18 million to $22 million is going to be coming from Auryon, as we talked about; 30% growth year-over-year for the Mechanical Thrombectomy platform together, which is AngioVac, AlphaVac, once it’s launched as well as Uni-Fuse; and then 20% growth in terms of probes for NanoKnife.

So the rest of the business, we are expecting to hold its own, you can think of it in that kind of 1% to 3% range for the device segments with the growth coming from those Med Tech platforms that I just went through..

Okay.

And just maybe, Steve, on Nano, when does the capital turn meaning you had tough comps this year, which makes for easy comps next year in fiscal '22, do you see a lift in capital at all?.

So, we are planning about to be flat in '22 to '21, when it comes to capital sales. So '21 was about half of what we saw in '20 and that’s not surprising, that’s when we launched the NanoKnife 3.0 System.

We are expecting '22 to be roughly similar to '21 from a capital placement perspective, but we are expecting to see that continued growth in the probe sales coming from, as Jim mentioned, DIRECT as well as the increased installed base that we’ve seen and then focusing on getting up and running and launching the prostate trial that Jim mentioned earlier today..

Okay.

And then I apologize if I missed this, but the Thrombo business, how big is it? Meaning the 30% growth, what’s the baseline we should use for growth?.

Yes. So AngioVac ended up at the end of the year, right around $25 million and then you can add in about $5 million or so of our Uni-Fuse. So those two together are comprising the mechanical thrombectomy base right now. And then as we launch AlphaVac towards the end of the calendar year, that will get added into to that section..

Okay, helpful. And then maybe, Steve for you, lastly on gross margin.

Is there any way you could break out the weights on margin between Auryon start up costs, the increase in raw materials, labor, just -- and then I would also love to know what do you think the exit rate is for gross margin in fiscal '22?.

Yes. We are looking at all those things. It’s a great question. So if you do your walk from '20 to '21, the Auryon start up cost, you can think of in the range of 100 basis points or so. When you put together the inflationary pressures that we are seeing, including freight costs, you are over another 100 basis points.

And then just the COVID impact with that we saw on our absorption is even another 100 basis points. Now we think some of those inflationary pressures are going to keep going as we head into FY '22. We are not in a different situation than what you heard from a lot of other companies. So there's going to be that drag as we move forward.

We were exiting the year in that north of 56%, but you are going to see a little bit of a pull back as those inflationary pressures -- pressure start to accelerate. So that’s where we get to our guidance of approximately 55% for FY '22..

Okay.

And sorry, Steve, the 56% exiting, that’s exiting '22 or were you referring to exiting '21 before some of these weights?.

I’m sorry, exiting '21 before you get some of these increasing accelerating weights..

Okay.

But we can assume that gross margin -- does gross margin trend higher throughout fiscal '22?.

That’s what we expect. We expect to see that ramp as you continue to get the benefits from the sales mix with the growth products that we’ve talked about, but that’s going to be mitigated by these inflationary and other cost pressures that you’re seeing. So, we are targeting that 55% for the full year.

I would expect to see the upward trend as you get through the full year, you’re going to have your normal peaks and valleys as you go through the year though..

Okay.

Is the expectation that you place more Auryon boxes in fiscal '22 than in fiscal '21?.

I don’t think the expectation is that will place more in '22 than '21, but we are going to continue at a good pace as we find the right accounts to open up. So we will continue to be placing boxes. I think the right way to think about it would be, think of '22 as very similar to '21 in terms of placements..

Okay. All right, I will leave it there. Thanks..

Thanks, Jason..

Thanks..

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

Great. Thanks. Good morning. Just a little more color on the question for procedures, how that works intra quarter, again given your May-end quarter.

It’s worth if you could give us a little more detail geographically, is there any nuances that we should be kind of aware of if you look around the globe irrelative to the COVID impact on procedures, and kind of where you think you are today because you said you’re not all the way there, are we 95% and if so 90% and when do we expect to get 100%, and just a little more granularity relative to the geographic segments.

Thanks..

Sure. Hey, Bill, it’s Jim. What we saw in the last, I will call it 60 days or so, that the April, May timeline was at least in the U.S., if you look at the U.S. as a region, more normalization in the U.S. where earlier that we had even regional pockets in the U.S. that were spotty or different.

But we saw some of that normalize during the last 60 days of our fiscal year, the April, May timeline. But we look at other spots, our Latin American business was affected very much so, and still is, by the pandemic obviously. In Europe we have pockets. So I think what we see, these pockets in Europe are more unstable, they are in the U.S., I said U.S.

has stabilized a bit more. And we’ve been challenged all year in Asia Pacific in our business and maybe the mix we have, we have a lot of our oncology business in the APAC region and a lot of those procedures were on hold during the course of the year.

So we haven’t seen those come back yet or the confidence that will come back to the rate that we expect at that point. So we are still seeing that. We will try to give you a good look at that, but it’s getting more normal, but I can’t tell you, it’s where we either expect normal procedure volumes to be at this point..

Okay. That’s helpful. Thank you. And then in terms of the Auryon guidance, you did $4.6 million, you’re guiding $18 million to $22 million, math says $4.6 million is a little above the low end of that range.

And I’m just wondering is there something -- are you shifting more to disposable on less capital or why would we see a little higher growth?.

Good question. I mean we had a great start to the year. Remember, we launched this product tactically in September of last year and it was a great launch. Bill, a couple of things we are going to see. We think the mix will also shift a little back to the in the hospital mix that we originally expected, Bill.

So we had a lot of OBL business right out of the gate because OBLs were doing procedures, hospitals weren’t. And we’re going to focus on really serving no matter where our customers are located. Let us try to continue that momentum. Q4, we knew we had good momentum. I’m not sure if we expected it to be a strong as it was.

But it’s a great way to end the year, so we feel good about the guidance range we’ve given, and we will do our best to try to hit that range for you guys and see what happens from there..

Okay. And then last question is, you’ve made a lot of investments, it seems you’re signaling that the -- with the new terminology, the Medical Technology versus the Medical Devices that it’s really focused on the three product lines.

You’ve made a lot of investments, but when should we expect to see you start harvesting those investments and leverage that into the model in terms of cash flow and earnings?.

Yes. Fair question..

And maybe that’s an Investor Day question and we can staple [ph] that as well..

Yes. We can answer it twice. We are going to you give a quick answer now, we can answer a little later in the morning when you see our presentation coming up soon. But honestly, what you will see is what we’ve talked about now. When I mentioned our investments, again they are happening in two major areas.

First is our investments in our technology and our portfolio, expanded new product iterations from our current platforms and new areas that we can sell into, meaning we are supporting data collection and proof of our science. Second also adding onto our selling and marketing and clinical research teams.

So those are both two large expenses we are taking. So for the next couple of years, we are going to focus on those to accelerate growth. At that point, at some point we will show you as we get closer, how we will start leveraging that towards operating profit as these are all categories that are accretive in gross margin.

So the profitable categories that over time are investments to pay for.

Steve?.

And Bill, I think Jim laid it out perfectly. Those are two main categories of our investments, R&D and then sales and marketing. As you will see through our Investor Day presentation, we are really excited about the platform aspects of our three growth driver products, Peripheral Atherectomy, Mechanical Thrombectomy and NanoKnife.

And we think there’s great opportunities in the short, medium and long-term for those platforms. So our R&D investments, we expect to continue to be very disciplined, but make the right investments to drive top line growth there. And as Jim mentioned, we are certainly investing in sales and marketing. What we did with Auryon is a great example.

We invested ahead of the curve with the sales force to make sure that we could support those top line growth initiatives that we had. We are going to continue to do that in '22 with Auryon as well as our AlphaVac and AngioVac.

So as you get out of the shorter term, you are going to see leverage from those sales investments, but that we expect to continue to have those R&D investments go into our platforms to drive top line growth over the medium and long-term. So I think that’s the way to think about it..

Great. Thank you for taking my questions..

Thanks, Bill..

I would now like to turn the call back over to Mr. Clemmer for any closing remarks. Mr.

Clemmer?.

Thanks, Rob. I appreciate your time this morning on the call and we hope you can join us at 9:30 Eastern Time for our investor presentation.

I would like to say thank you again for the AngioDynamics employees and their dedication to our mission, working tirelessly throughout the pandemic, learning new ways to do our jobs, new ways to serve our customers and keeping all of our thoughts on the outcomes that our customers deserve and our products thrive, when they are used in the hands of talented caregivers worldwide.

Our quality and operations team made sure we had adequate supply of quality products during this challenging time. We are really pleased with our efforts and the result. Thanks to each of them. Rob, thanks again for your time this morning..