Good morning, and welcome to the AngioDynamics 4th 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. As a reminder, this conference is being recorded. The news release detailing our Q4 fiscal year 2021 results crossed the wire earlier this morning is available on the company's website.
This conference call is also being broadcast live over the Internet at the Investors section of the company's website at www.angiodynamics.com, and the webcast replay of the call will be available at the same site, shortly after today's Investor and Technology Day presentation, which will begin at 9:30 a. M. Eastern Time. Before we begin, I would like to caution listeners that during the course of this conference call, the company will make projections or forward looking statements regarding future events, including statements about expected revenue, adjusted earnings and gross margins for fiscal year 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 10Q and 10 ks, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward looking statements.
The company will also discuss certain non GAAP financial measures during 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 Q4 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 4th quarter and full year financial performance and our FY 'twenty two 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 a year that was continually disrupted by the COVID-nineteen pandemic, we made significant progress in our transformation into a customer focused, technology driven, growth oriented company. From the onset of the COVID-nineteen 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-nineteen, we ended FY 'twenty one with more people employed in the AngioDynamics family And we had pre COVID. During the year, we initiated and executed on strategic research and development And sales and marketing investments in our growth platforms. These investments drove growth in FY 'twenty one and are poised to facilitate accelerating top line growth into FY 'twenty two 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-nineteen pandemic, particularly the acute disruption that occurred during our Q4 of FY 'twenty. As a result, this morning, I'll also be referring to sequential growth over our fiscal 3rd 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, Aireon, mechanical thrombectomy and NanoKnife as our medtech businesses And the remainder of our portfolio as our med device businesses. With that in mind, Strong performance from our medtech platforms as well as our more mature medtech businesses drove solid 4th quarter and full year results. We ended FY 'twenty one with full year revenue of $291,000,000 representing growth of 10.2 We completed our 4th quarter with revenue of $76,800,000 Representing sequential growth of 8% over the 3rd quarter, reflecting the momentum we are building As we head into FY 'twenty two, I am 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 'twenty one, 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 medtech platforms and generating future growth. Diving deeper into our performance in the quarter. The positive trend within our Aireon business continued into the 4th quarter, With revenue of $4,600,000 bringing total FY 2020 Aeryon revenue to $11,100,000 Aireon continued its sequential growth as well, coming off $3,300,000 of revenue in the fiscal Q3. For FY 'twenty two, we expect Aireon to continue to grow meaningfully and generate revenue in the range of 18 to $22,000,000 We continued to see strong growth from our AngioVac platform, as evidenced by the record number of procedures performed In both fiscal 4Q 'twenty one and for the full year, AngioVac platform revenue increased 14% Sequentially in the Q4, with year over year growth of 47% in FY 'twenty one. Additionally, we are thrilled about the recent 510 clearance of Alphavac, our new multipurpose 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 angioVax system We'll continue to drive strong growth in the complex, right atrium focused market. Together, AngioVac and Alphavac comprise our mechanical thrombectomy platform, which we anticipate We'll grow approximately 30% year over year in FY22, inclusive of AlphaVac revenue Following its anticipated launch toward the end of calendar year 2021. NanoKnife probe sales were strong in the 4th 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 are coming off a strong prior year quarter due to the launch of our NanoKnock 3.0 generator, As well as a challenging capital environment. NanoKnife probe sales for FY 'twenty one 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 2 main drivers. 1st, 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 'twenty two. On the internal R and D investment front, We continued to strategically invest in growth initiatives during the Q4 as we supported our medtech platforms already in the market As well as products in our Development pipeline. It's worth noting that over the past 3 years, We have grown R and D spend at a greater than 10% CAGR and are now starting to clearly see the results of that investment. Throughout FY 'twenty two, we plan to continue to strategically invest to further advance our current portfolio And expand into larger, faster growing addressable markets.
M and A remained on the back burner during the 4th quarter As we continue to focus on balancing growth and profitability in the face of COVID related challenges. However, strategic and tuck in M and A remains a key piece of our long term growth strategy, and we continuously monitor the landscape for these 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 Q3, 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 'twenty one, particularly our 4th quarter results Are significantly impacted by the COVID-nineteen pandemic related disruption. Our net sales for the Q4 of FY 'twenty one Increased 31.7 percent year over year to $76,800,000 Our growth was driven by continued sequential growth in our Aeryon atherectomy business, Strong AngioVac performance, NanoKnife probe growth and solid performance from our med device businesses. During the Q4, 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 percent year over year to $38,100,000 Now this increase was driven by the greater impact of COVID-nineteen on the prior year period And the continued strength of 2 important growth products, AngioVac, which grew 108% year over year and Aeryon. Arian contributed $4,600,000 in revenue during the Q4, building upon the momentum that we saw following the product's official commercial launch In the Q2 and strong performance in the Q3, total fiscal year 2021 revenue for Aireon was 11,100,000 Aireon 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 2022, we expect Aireon to generate revenue in the range of $18,000,000 to $22,000,000 Vascular access revenue increased 3.2% versus the prior year period, driven by growth in ports, which offset a decline in PIKs. As we previously discussed, the Q4 of FY 2020 included approximately $1,000,000 of sales related to a one time order from NHS through our distribution partner. Additionally, PIX and Midlines were 2 of the few product groups that did not suffer significant disruption during our Q4 of FY 2020 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 where many of our businesses continue to be impacted by the COVID-nineteen pandemic. Moving down the income statement. Our gross margin for the Q4 of FY 'twenty one was 55.1%, an increase of 3.30 basis points compared to a year ago and an increase of 100 basis points sequentially from our 3rd fiscal quarter. The improvement was largely due to sales mix, though this was partially offset by continued staffing pressures and anticipated Arian start up costs.
And we continued to reduce inventory during the Q4, ending at $48,600,000 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 Aireon, mechanical thrombectomy and NanoKnife. However, during the back half of FY 'twenty one, 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 twenty twenty one, and we have faced and continue to face challenges in fully staffing our Queensbury, New York This tight labor market has resulted in higher labor and manufacturing costs. In addition, we've experienced significant freight cost pressures, We observed what we believe to be the beginning of raw material inflationary pressures. And 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 AARON 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 2022. The net result is that for FY 'twenty two, we expect gross margin of approximately 55%. Our research and development expense during the Q4 of FY 2021 was $9,100,000 or 11.8 percent of sales compared to $7,200,000 12.4 percent of sales a year ago. We continue our strategy of disciplined investment in R and D focused on driving our key technology platforms. For the fiscal year, R and D expense was $36,400,000 or 12.5 percent of sales.
For fiscal year 2022, we anticipate R and D spend to similarly target 10% to 13% of sales. SG and A expense for the Q4 of FY 2021 increased to 33,000,000 representing 42.9 percent of sales compared to $26,400,000 representing 45.3 percent of sales a year ago. For the fiscal year, SG and A expense was $117,200,000 or 40.3 percent of sales. We're pleased with our ability to general and 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 'twenty two SG and A spending to approximate 40% to 45% of revenue.
As we previously mentioned, SG and A spend in FY 2021 was positively impacted by reduced travel associated with the ongoing COVID-nineteen pandemic. We do expect travel costs along with our ongoing investments in our sales organizations to increase in FY 2022 as the global environment improves and restrictions ease. Our adjusted net loss for the Q4 of FY 2021 was $100,000 or breakeven on a per share basis compared to an adjusted net loss of $2,100,000 or $0.06 per share in the Q4 of last year. For the fiscal year, adjusted net income was $1,900,000 or income of $0.05 per share compared to adjusted net income of $3,500,000 or $0.09 per share a year ago. As a reminder, our Q3 of FY 'twenty one included a benefit from the CARES Act.
Adjusted EBITDA in the Q4 of FY 'twenty one was $4,500,000 compared to $600,000 in the Q4 of FY 'twenty. For the fiscal year, adjusted EBITDA was $19,500,000 compared to $18,000,000 in fiscal 2020. Turning to our balance sheet. We began the quarter with roughly $54,500,000 in cash and cash equivalents, And we generated free cash flow of $3,100,000 At May 31, 2021, we had $48,200,000 in cash and cash equivalents And $20,000,000 in debt outstanding, having repaid $10,000,000 of our outstanding debt during the fiscal Q4. Turning now to guidance.
We anticipate that FY 'twenty two net sales will be in the range of $305,000,000 to $310,000,000 and full year adjusted earnings per share will be in the range of 0 $0.05 as we continue to invest in research and development and sales and marketing for our key medtech platforms. Our guidance range contemplates top line growth of 5% to 7% over FY 'twenty one, which included approximately $5,000,000 of revenue Related to that one time sale to the NHS through our distribution partner. Now 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 3 key technology platforms, AngioVac, Aireon and NanoKnife, Including the recent 510 clearance of the Alphavac mechanical thrombectomy system. We view this as the 1st 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?
Thank you. We'll now be conducting a question and answer 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 question with 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 Orion is sequentially growing in?
Hi, Matt. Good morning. It's Jim. You know, Matt, we'll give more detail later, but we're really seeing a blend of above and below the knee. Initially, we thought that our users would 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 mat, and now we're seeing a trend where they're getting very confident in our technology, they're taking it below the knee. So, What is usually more challenging, procedures. And there's probably only one of the other companies that do that well. So, I think we're now becoming a really key and trusted partner And that's where we're seeing our blend really go closer to a fifty-fifty split above and below the knee. What we're also seeing, Matt, too, as we 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 was delivered in the past year in the OBLs. I think we'll see a blend getting back to a hospital OBL mix, a little more favorable over the course of this coming fiscal year.
And then Jim, as you've seen that sequential improvement that's 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 Orion device 2, 3 quarters ago. You've gotten through the initial orders and now you're starting to see the sites Increase the revenue per increase procedures per site.
So you hit the nail on the head, Matt. We're measuring all of those effects. So Exactly what you asked is the way we're measuring this. Again, this is really a startup business within a mature operating company. We wanted to be really careful As we took on this marketplace, our initial moves, as you know, was getting our supply chain robust, make sure we get the quality we need on our hardware, first the capital, second on Our disposable catheters.
So right now, Matt, we're doing everything you said. Every time we place a new laser and now we have a good trend. We know how long it takes for the users to get confident, Comfortable with the device. We can expect the catheter usage to increase on a monthly basis. So, we're measuring the metrics you gave us, plus about half a dozen more.
As we get this business off the ground, we're 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're going to measure diligently, and we'll report back to you kind of whatever you'd like to see over time as we expect this to be a growth driver for a long time for us.
Yes. And I think people generally understand the startup costs associated with this and the You have to build inventory before you launch. How should we think about so if we think about the mix of Orion revenue Versus the company average gross margin as you get to scale.
Yes. Steve, comment? Yes.
As we get to scale, Matt, we certainly expect Aireon Standard margin to be accretive to overall corporate margins. As you mentioned, we have those start up costs and they're 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 'twenty two and certainly beyond that, That the overall margin profile that Arian 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 stack 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, near the end of the calendar year 2019, we relaunched our AngioVac 3.0, Which we really incorporate a lot of user feedback into that design and development of that launch. So we got good momentum right as we launched it. Then the pandemic hit in March. But we are confident 2 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 to get more and more cases as they gain confidence in the great outcomes they're seeing. So it's a blend of both. So our job, again, is to keep talking about why this technology It 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.
They're 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.
And the one thing I would add to that, Matt, is as you'll see more Through our Investor Day presentation this morning, we're really excited about the upcoming Alphavac launch. And what you'll see is that those two products, Alphavac and AngiVac, are really So we're going after the overall DVT market for mechanical thrombectomy, but we feel both of those products have a role to play. And so we're not expecting significant cannibalization to come from the AngioVac side once we launch Alphavac. And so we think that there's great runway with AngioVac, as you've continued to 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 fiscal year end, there's always, I think attention on the intra quarter trends. Wondering if you could just comment on trends in April May?
Hi, Jason. As you know, we've been 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 and closer to normal during the course of the year. And as we looked at the time line 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 tell, Jason, between the metrics, we have hard metrics inside And just got a feel from our sales reps talking to customers, we're not back to what we would assume is a normal operating environment.
We're as close as it's been In the last 6 months or so, but we still feel there's not 100% alignment to where we would call normal treatment occurring.
Okay.
In terms of fiscal 2022, what's embedded in the guidance for segment growth Between your endovascular, vascular access and oncology business?
Yes. So Jason, as Jim mentioned, what we wanted to focus on when we gave the revenue guidance, so we're guiding $305,000,000 to $310,000,000 for FY 'twenty You're going to see 18% to 22% is going to be coming from Aireon, 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 UniFuse. And then 20% growth in terms of probes for NanoKnife. So the rest of the business, we're expecting to hold its own. You can think of it in that kind of 1% to 3 Percent 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 2022, do you see a lift in capital at all? So
we're planning about to be flat in 2022 to 2021 when it comes to capital sales. So 2021 was About half of what we saw in 2020, and that's not surprising. That's when we launched the NanoKnife 3.0 system. We're expecting 2022 to be roughly similar to 2021 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 $25,000,000 and then you can add in About $5,000,000 or so of our UniFuse. So those 2 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 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 Ori, on startup costs, the increase in raw materials, labor, just and then I'd also love to know what do you think the exit rate is for gross margin in
Yes. No, we're looking at all those things. It's a great question. So if you do your walk from 2020 to 2021, the Aeryon Startup costs, you can think of in the range of 100 basis points or so. When you put together the inflationary pressures that we're seeing, including freight costs, You're 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 2022. We're not in a different situation than what you've heard from a lot of other companies. So, There is going to be that drag as we move forward. We were exiting the year in that north of 56%, But you're going to see a little bit of a pullback as those inflationary pressures start to accelerate.
So that's where we get to our guidance of approximating 55%
2 or were you referring to exiting 'twenty one before some of these weights?
I'm sorry, exiting 'twenty one before you get some of these increasing accelerating weights.
Okay. But we can assume that gross margin does gross margin trend higher throughout fiscal 2022?
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're targeting that $55,000,000 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 Orion boxes in fiscal 2022 than in fiscal 2021?
I don't think the expectation is that we'll place more in 2022 than 2021, 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 'twenty two as very similar to 'twenty one in terms of placements.
Okay.
All right. I'll leave it there. Thanks.
Thanks, Jason. Thanks.
Our next question The line of Bill Plankovic with Canaccord Genuity. Please proceed with your question.
Great. Thanks. Good morning. Just A little more color on the question for procedures, how that looks intra quarter again given your May end quarter. I was wondering 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 relative to the COVID impact on procedures and kind of where you think you are today. As you said, You're not all the way there. Are we 95%? And if so, 90% and when do we expect to get to 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'll call, 60 days or so that the April May time line was at least in the U. S. If you look at the U.
S. As a region, more normalization in the U. S, 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 You know, by the pandemic, obviously. In Europe, we have pockets. So I think what we see, these pockets in Europe are more unstable than 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. It may be 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 it will come back to the rate that we expect at that point.
So we're still seeing that. We'll 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 would expect normal procedure volumes to be at this point.
Okay. That's helpful. Thank you. And then in terms of the Aireon guidance, you did 4.6 $1,000,000 are guiding $18,000,000 to $22,000,000 Math says $4,600,000 is a little above the low end of that range. And I'm just wondering, is there something shifting more to disposable and 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 technically in September of last year, and it was a great launch. A couple of things we're going to see.
We think the mix will also shift a little back to the in the hospital mix that we originally Bill, so we had a lot of OBL business right out of the gate because the 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. The Q4, we knew we had good momentum. I'm not sure if we expected it to be as 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'll 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 With the new terminology, the metal technology versus the medical devices that it's really focused on the 3 product lines. When 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.
Fair question.
Maybe that's an Investor
Yes. We can answer it twice. If you give a quick answer now, we can answer it a little later in the morning when you see our presentation coming up soon. But honestly, what you'll see is what we talked about now. When I mentioned our investments, again, happening in 2 major areas.
First is our investments in our technology and our portfolio, Expanded new products, iterations from our current platforms, and new areas, that we can sell into, meaning where we're supporting data collection And proof of our science. 2nd, also adding on to our selling and marketing and clinical research teams. So those are both 2 large expenses we're taking. So for the next couple of years, we're going to focus on those to accelerate growth. At that point, at some point, we'll show you as we get closer Al, we'll start leveraging that towards operating profit as these are all categories that are accretive in gross margin.
So they're profitable categories But over time, our investments will pay for. Steve?
And Bill, I think Jim laid it out perfectly. There's those 2 main categories of our investments, R and D and then sales and marketing. As you'll see through our Investor Day presentation, we're really excited about the platform aspects of our 3 growth driver products, Periphery 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 and 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're certainly Investing in sales and marketing. And what we did with Arian 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're going to continue to do that in 2022 with Arian as well as our Alphavac and AngioVac. So, as you get out of the shorter term, you're going to see leverage From those sales investments, but that we expect to continue to have those R and 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
Great. Thank you for taking my questions.
Thanks, Bill.
I'd now like to turn the call back over to Mr. Clummer for any closing remarks. Mr. Clummer?
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'd 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 drive when they're used in the hands of talented caregivers worldwide. Our quality and operations team made sure we had