Apr. 7--QUEENSBURY -- Medical device maker AngioDynamics Inc. said Thursday that expenses related to the CEO transition drove down profits in the firm's fiscal third quarter, which ended Feb. 28, though sales increased for the period.

The Queensbury-based firm incurred $2.8 million in costs associated with former CEO Eamonn Hobbs' stock option agreement and the recruitment of the new CEO, Jan Keltjens.

AngioDynamics reported $1.9 million in net income for the quarter, down from $4.9 million a year ago, though the 2008 figure was inflated due to a litigation settlement gain. Excluding the litigation settlement and the CEO costs, the company said profits increased 26 percent in the third quarter to $3.7 million from $2.9 million a year ago. Net sales were up 21 percent to $49.4 million or 8 cents per share in the third quarter, compared with the $40.7 million or 20 cents per share reported a year ago.

While not entirely immune to the global recession, AngioDynamics said its balance sheets and cash position remain strong. The results reported Thursday include the acquisition of a line of catheter products from FlowMedica in January.

AngioDynamics is a leading provider of medical devices used by interventional radiologists and surgeons for the minimally invasive treatment of cancer and peripheral vascular disease. The firm employed approximately 540 at its Airport Industrial Park facility at last report.

Keltjens, in an investor conference call Thursday, noted his one-month anniversary at the company. And while he shied away from specific forward-looking statements, he said his vision for the company includes more focus on product groups with strong potential, a narrowing of the research and development portfolio and attention to operations and supply chain management.

Keltjens said he sees real potential for the NanoKnife IRE System in the treatment of cancer for millions of people. The device uses probes to zap and dissolve cancer cells in a minimally invasive way. The company plans to refocus its efforts on specifically marketing the device for certain cancer treatments within the U.S. to accelerate the commercial rollout of the product here. To that end, the firm is pursuing FDA approval for two different uses of the NanoKnife, one being prostate cancer.

"I've come to the conclusion that to maximize potential, we need to significantly refocus on clinical and commercial programs," he said. Keltjens noted that five out of 21 patients in non-prostate trials reported cardiac arrhythmia, a problem the company says it has addressed.

Looking forward, Keltjens said the goal of reaching $1 million in NanoKnife sales this fiscal year now seems out of reach. AngioDynamics also revised its net sales expectations for the fiscal year down 2 percent to between $195 million and $198 million. The gross margin of 61 to 62 percent is expected to hold steady, while the operating income was revised downward by $2 million to $3 million.

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