Artivion Reports First Quarter 2023 Financial Results
First Quarter and Recent Business Highlights:
- Achieved revenue of
$83.2 million in the first quarter of 2023 versus$77.2 million in the first quarter of 2022, an increase of 8% on a GAAP basis and an increase of 10% on a non-GAAP constant currency basis - On-X revenues increased 23% on a GAAP basis and 24% on a non-GAAP constant currency basis in the first quarter of 2023 compared to the first quarter of 2022
- Aortic stent graft revenues increased 3% on a GAAP basis and 8% on a non-GAAP constant currency basis in the first quarter of 2023 compared to the first quarter of 2022
- Received notice from the FDA that the PerClot PMA is approvable subject to finalization of the Establishment Inspection Report (EIR) for our recent pre-approval inspection
"I am pleased with our first quarter results, as we delivered constant currency revenue growth of 10% year-over-year and remain on track to achieve or exceed the revenue and EBITDA growth targets for 2023 and beyond that we outlined last year. Our strong performance was driven by year-over-year On-X revenue growth of 24% and aortic stent graft revenue growth of 8%, with BioGlue also growing 8%, and tissue processing revenue growing 7%, all on a constant currency basis. We also saw
First Quarter 2023 Financial Results
Total revenues for the first quarter of 2023 were
Net loss for the first quarter of 2023 was
2023 Financial Outlook
Additionally,
The Company's financial performance for 2023 and future periods is subject to the risks identified below.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, including non-GAAP revenue, non-GAAP net income, non-GAAP EBITDA, and non-GAAP general, administrative, and marketing expenses. Investors should consider this non-GAAP information in addition to, and not as a substitute for, financial measures prepared in accordance with US GAAP. In addition, this non-GAAP financial information may not be the same as similar measures presented by other companies. The Company's non-GAAP revenues are adjusted for the impact of changes in currency exchange. The Company's non-GAAP net income; non-GAAP EBITDA; and non-GAAP general, administrative, and marketing results exclude (as applicable) depreciation and amortization expense; interest income and expense; stock-based compensation expense; loss or gain on foreign currency revaluation; clinical trial termination expense; income tax expense or benefit; corporate rebranding expense; business development, integration, and severance income or expense; non-cash interest expense; and gain from sale of non-financial assets. The Company generally uses non-GAAP financial measures to facilitate management's review of the operational performance of the company and as a basis for strategic planning. Company management believes that these non-GAAP presentations provide useful information to investors regarding unusual non-operating transactions; the operating expense structure of the Company's existing and recently acquired operations, without regard to its on-going efforts to acquire additional complementary products and businesses, and the transaction and integration expenses incurred in connection with recently acquired and divested product lines; and the operating expense structure excluding fluctuations resulting from foreign currency revaluation and stock-based compensation expense. The Company believes it is useful to exclude certain expenses because such amounts in any specific period may not directly correlate to the underlying performance of its business operations or can vary significantly between periods as a result of factors such as impact of recent acquisitions, non-cash expense related to amortization of previously acquired tangible and intangible assets, and any related adjustments to their carrying values. The Company has adjusted for the impact of changes in currency exchange from certain revenues to evaluate comparable product growth rates on a constant currency basis. The Company does, however, expect to incur similar types of expenses and currency exchange impacts in the future, and this non-GAAP financial information should not be viewed as a statement or indication that these types of expenses will not recur. Company management encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety, including the reconciliation of GAAP to non-GAAP financial measures."
Webcast and Conference Call Information
The Company will hold a teleconference call and live webcast later today,
The live webcast and replay can be accessed by going to the Investors section of the
About
Headquartered in suburban
Forward Looking Statements
Statements made in this press release that look forward in time or that express management's beliefs, expectations, or hopes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include our beliefs that we will be better positioned to meet the robust demand for our stent grafts by the enhanced productivity of our larger German production staff; we remain confident in our ability to grow our total addressable market by developing our pipeline and expanding our presence into new markets and within our existing markets; and we remain well on track to meet our 2024 year-end commitments to deliver double-digit compounded annual constant currency revenue growth and achieve adjusted EBITDA in excess of
|
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Three Months Ended |
|||
2023 |
2022 |
||
Revenues: |
|||
Products |
$ 62,291 |
$ 57,542 |
|
Preservation services |
20,938 |
19,671 |
|
Total revenues |
83,229 |
77,213 |
|
Cost of products and preservation services: |
|||
Products |
19,533 |
17,408 |
|
Preservation services |
9,969 |
9,086 |
|
Total cost of products and preservation services |
29,502 |
26,494 |
|
Gross margin |
53,727 |
50,719 |
|
Operating expenses: |
|||
General, administrative, and marketing |
50,365 |
38,955 |
|
Research and development |
7,223 |
10,128 |
|
Total operating expenses |
57,588 |
49,083 |
|
Operating (loss) income |
(3,861) |
1,636 |
|
Interest expense |
6,096 |
3,948 |
|
Interest income |
(75) |
(16) |
|
Other (income) expense, net |
(963) |
133 |
|
Loss before income taxes |
(8,919) |
(2,429) |
|
Income tax expense |
4,613 |
960 |
|
Net loss |
$ (13,532) |
$ (3,389) |
|
Loss per share: |
|||
Basic |
$ (0.33) |
$ (0.08) |
|
Diluted |
$ (0.33) |
$ (0.08) |
|
Weighted-average common shares outstanding: |
|||
Basic |
40,432 |
39,850 |
|
Diluted |
40,432 |
39,850 |
|
Net loss |
$ (13,532) |
$ (3,389) |
|
Other comprehensive loss: |
|||
Foreign currency translation adjustments |
3,616 |
(3,775) |
|
Comprehensive loss |
$ (9,916) |
$ (7,164) |
|
|||
|
|
||
(Unaudited) |
|||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 30,773 |
$ 39,351 |
|
Trade receivables, net |
62,760 |
61,820 |
|
Other receivables |
3,952 |
7,764 |
|
Inventories, net |
76,273 |
74,478 |
|
Deferred preservation costs, net |
47,415 |
46,371 |
|
Prepaid expenses and other |
19,508 |
17,550 |
|
Total current assets |
240,681 |
247,334 |
|
|
245,648 |
243,631 |
|
Acquired technology, net |
149,833 |
151,263 |
|
Operating lease right-of-use assets, net |
41,473 |
41,859 |
|
Property and equipment, net |
38,716 |
38,674 |
|
Other intangibles, net |
30,807 |
31,384 |
|
Deferred income taxes |
2,373 |
1,314 |
|
Other assets |
7,542 |
7,339 |
|
Total assets |
$ 757,073 |
$ 762,798 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 9,473 |
$ 12,004 |
|
Accrued expenses |
9,678 |
12,374 |
|
Accrued compensation |
9,028 |
13,810 |
|
Taxes payable |
6,911 |
2,635 |
|
Current maturities of operating leases |
3,398 |
3,308 |
|
Accrued procurement fees |
2,155 |
2,111 |
|
Current portion of long-term debt |
1,620 |
1,608 |
|
Other liabilities |
1,698 |
1,825 |
|
Total current liabilities |
43,961 |
49,675 |
|
Long-term debt |
306,279 |
306,499 |
|
Contingent consideration |
45,200 |
40,400 |
|
Non-current maturities of operating leases |
40,774 |
41,257 |
|
Deferred income taxes |
23,826 |
24,499 |
|
Deferred compensation liability |
6,127 |
5,468 |
|
Non-current finance lease obligation |
3,582 |
3,644 |
|
Other liabilities |
7,407 |
7,027 |
|
Total liabilities |
$ 477,156 |
$ 478,469 |
|
Commitments and contingencies |
|||
Shareholders' equity: |
|||
Preferred stock |
— |
— |
|
Common stock (75,000 shares authorized, 42,366 and 41,830 shares issued and outstanding in |
424 |
418 |
|
Additional paid-in capital |
342,883 |
337,385 |
|
Retained deficit |
(30,749) |
(17,217) |
|
Accumulated other comprehensive loss |
(17,993) |
(21,609) |
|
|
(14,648) |
(14,648) |
|
Total shareholders' equity |
279,917 |
284,329 |
|
Total liabilities and shareholders' equity |
$ 757,073 |
$ 762,798 |
|
|||
Three Months Ended |
|||
2023 |
2022 |
||
Net cash flows from operating activities: |
|||
Net loss |
$ (13,532) |
$ (3,389) |
|
Adjustments to reconcile net loss to net cash from operating activities: |
|||
Depreciation and amortization |
5,734 |
5,881 |
|
Change in fair value of contingent consideration |
4,800 |
(1,800) |
|
Non-cash compensation |
3,341 |
3,166 |
|
Non-cash lease expense |
1,802 |
1,920 |
|
Write-down of inventories and deferred preservation costs |
1,123 |
989 |
|
Deferred income taxes |
(2,167) |
(2,966) |
|
Other |
754 |
496 |
|
Changes in operating assets and liabilities: |
|||
Receivables |
3,540 |
(1,710) |
|
Prepaid expenses and other assets |
(2,014) |
1,494 |
|
Inventories and deferred preservation costs |
(3,222) |
(1,359) |
|
Accounts payable, accrued expenses, and other liabilities |
(6,313) |
(3,320) |
|
Net cash flows used in operating activities |
(6,154) |
(598) |
|
Net cash flows from investing activities: |
|||
Capital expenditures |
(2,238) |
(2,239) |
|
Acquisition of intangible assets |
(605) |
(469) |
|
Net cash flows used in investing activities |
(2,843) |
(2,708) |
|
Net cash flows from financing activities: |
|||
Proceeds from exercise of stock options and issuance of common stock |
2,581 |
2,318 |
|
Redemption and repurchase of stock to cover tax withholdings |
(590) |
(1,730) |
|
Repayment of term loan |
(690) |
(694) |
|
Other |
(130) |
(129) |
|
Net cash flows provided by (used in) financing activities |
1,171 |
(235) |
|
Effect of exchange rate changes on cash and cash equivalents |
(752) |
(61) |
|
Decrease in cash and cash equivalents |
(8,578) |
(3,602) |
|
Cash and cash equivalents beginning of period |
39,351 |
55,010 |
|
Cash and cash equivalents end of period |
$ 30,773 |
$ 51,408 |
|
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Three Months Ended |
|||
2023 |
2022 |
||
Products: |
|||
Aortic stent grafts |
$ 26,150 |
$ 25,506 |
|
On-X |
17,656 |
14,371 |
|
Surgical sealants |
16,703 |
15,681 |
|
Other |
1,782 |
1,984 |
|
Total products |
62,291 |
57,542 |
|
Preservation services |
20,938 |
19,671 |
|
Total revenues |
$ 83,229 |
$ 77,213 |
|
Revenues: |
|||
US |
$ 41,333 |
$ 37,735 |
|
International |
41,896 |
39,478 |
|
Total revenues |
$ 83,229 |
$ 77,213 |
|
|||||||||
Revenues for the |
Percent |
||||||||
2023 |
2022 |
||||||||
US GAAP |
US GAAP |
Exchange |
Constant |
Constant |
|||||
Products: |
|||||||||
Aortic stent grafts |
$ 26,150 |
$ 25,506 |
$ (1,238) |
$ 24,268 |
8 % |
||||
On-X |
17,656 |
14,371 |
(146) |
14,225 |
24 % |
||||
Surgical sealants |
16,703 |
15,681 |
(286) |
15,395 |
8 % |
||||
Other |
1,782 |
1,984 |
(15) |
1,969 |
-9 % |
||||
Total products |
62,291 |
57,542 |
(1,685) |
55,857 |
12 % |
||||
Preservation services |
20,938 |
19,671 |
(35) |
19,636 |
7 % |
||||
Total |
$ 83,229 |
$ 77,213 |
$ (1,720) |
$ 75,493 |
10 % |
Three Months Ended |
|||
2023 |
2022 |
||
Reconciliation of G&A expense, GAAP to adjusted G&A, non-GAAP: |
|||
General, administrative, and marketing expense, GAAP |
$ 50,365 |
$ 38,955 |
|
Business development, integration, and severance expense (income) |
4,997 |
(1,579) |
|
Corporate rebranding expense |
149 |
883 |
|
Adjusted G&A, non-GAAP |
$ 45,219 |
$ 39,651 |
|
|||
Three Months Ended |
|||
2023 |
2022 |
||
Reconciliation of net loss, GAAP to adjusted EBITDA, non-GAAP: |
|||
Net loss, GAAP |
$ (13,532) |
$ (3,389) |
|
Adjustments: |
|||
Interest expense |
6,096 |
3,948 |
|
Depreciation and amortization expense |
5,734 |
5,881 |
|
Business development, integration, and severance expense (income) |
5,452 |
(1,579) |
|
Income tax expense |
4,613 |
960 |
|
Stock-based compensation expense |
3,341 |
3,166 |
|
Corporate rebranding expense |
149 |
883 |
|
Interest income |
(75) |
(16) |
|
(Gain) loss on foreign currency revaluation |
(973) |
133 |
|
Adjusted EBITDA, non-GAAP |
$ 10,805 |
$ 9,987 |
Artivion Inc. and Subsidiaries |
|||
Three Months Ended |
|||
2023 |
2022 |
||
GAAP: |
|||
Loss before income taxes |
$ (8,919) |
$ (2,429) |
|
Income tax expense |
4,613 |
960 |
|
Net loss |
$ (13,532) |
$ (3,389) |
|
Diluted loss per common share |
$ (0.33) |
$ (0.08) |
|
Diluted weighted-average common shares outstanding |
40,432 |
39,850 |
|
Reconciliation of loss before income taxes, GAAP to adjusted income, non-GAAP: |
|||
Loss before income taxes, GAAP: |
$ (8,919) |
$ (2,429) |
|
Adjustments: |
|||
Business development, integration, and severance expense (income) |
5,452 |
(1,579) |
|
Amortization expense |
3,881 |
4,084 |
|
Non-cash interest expense |
462 |
456 |
|
Corporate rebranding expense |
149 |
883 |
|
Adjusted income before income taxes, non-GAAP |
1,025 |
1,415 |
|
Income tax expense calculated at a tax rate of 25% |
256 |
354 |
|
Adjusted net income, non-GAAP |
$ 769 |
$ 1,061 |
|
Reconciliation of diluted loss per common share, GAAP to adjusted diluted income per |
|||
Diluted loss per common share, GAAP: |
$ (0.33) |
$ (0.08) |
|
Adjustments: |
|||
Effect of 25% tax rate |
0.17 |
0.04 |
|
Business development, integration, and severance expense (income) |
0.13 |
(0.04) |
|
Amortization expense |
0.10 |
0.10 |
|
Non-cash interest expense |
0.01 |
0.01 |
|
Corporate rebranding expense |
— |
0.02 |
|
Tax effect of non-GAAP adjustments |
(0.06) |
(0.02) |
|
Adjusted diluted income per common share, non-GAAP |
$ 0.02 |
$ 0.03 |
|
Reconciliation of diluted weighted-average common shares outstanding GAAP to diluted |
|||
Diluted weighted-average common shares outstanding, GAAP: |
40,432 |
39,850 |
|
Adjustments: |
|||
Effect of dilutive stock options and awards |
418 |
441 |
|
Diluted weighted-average common shares outstanding, non-GAAP |
40,850 |
40,291 |
Contacts:
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Executive Vice President & |
Phone: 332-895-3222 |
Chief Financial Officer |
|
Phone: 770-419-3355 |
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