Artivion Reports Second Quarter 2022 Financial Results
Second Quarter and Recent Business Highlights:
- Achieved revenue of
$80.3 million in the second quarter 2022 versus$76.1 million in the second quarter of 2021, an increase of 6% on a GAAP basis and 9% on a non-GAAP constant currency basis - Enrolled first patients in
U.S. AMDS clinical trial, PERSEVERE - Completed on-site facility inspections for BioGlue CE Mark renewal
"During the second quarter we made substantial progress on each of our key three-year strategic growth initiatives. We delivered year-over-year revenue growth of 6% on a GAAP basis and 9% on a non-GAAP constant currency basis. These results were driven primarily by 23% growth in aortic stent graft revenue and 12% growth in On-X revenue, both on a constant currency basis. We also executed internationally, delivering 38% revenue growth on a constant currency basis in
Second Quarter 2022 Financial Results
Total revenues for the second quarter of 2022 were
Net loss for the second quarter of 2022 was (
2022 Financial Outlook
The Company's financial performance for 2022 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; business development, integration, and severance income or expense; loss or gain on foreign currency revaluation; income tax expense or benefit; corporate rebranding expense; and non-cash interest expense. 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 non-GAAP to 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 expect our strong momentum to continue through the remainder of the year as we remain focused on executing on our key objectives; our product pipeline is expected to drive growth in both the near and long term; we continue to anticipate FDA PMA approval for PROACT Mitral and for PerClot this year; we have made also made significant progress toward completion of enrollment in our PROACT Xa trial, which we believe will revolutionize the use of mechanical heart valves in
|
|||||||
Three Months Ended |
Six Months Ended |
||||||
2022 |
2021 |
2022 |
2021 |
||||
Revenues: |
|||||||
Products |
$ 58,936 |
$ 56,076 |
$ 116,478 |
$ 109,421 |
|||
Preservation services |
21,404 |
20,072 |
41,075 |
37,814 |
|||
Total revenues |
80,340 |
76,148 |
157,553 |
147,235 |
|||
Cost of products and preservation services: |
|||||||
Products |
18,230 |
16,178 |
35,638 |
31,089 |
|||
Preservation services |
9,938 |
9,457 |
19,024 |
17,795 |
|||
Total cost of products and preservation services |
28,168 |
25,635 |
54,662 |
48,884 |
|||
Gross margin |
52,172 |
50,513 |
102,891 |
98,351 |
|||
Operating expenses: |
|||||||
General, administrative, and marketing |
38,983 |
40,830 |
77,938 |
79,468 |
|||
Research and development |
8,648 |
8,360 |
18,776 |
16,114 |
|||
Total operating expenses |
47,631 |
49,190 |
96,714 |
95,582 |
|||
Operating income |
4,541 |
1,323 |
6,177 |
2,769 |
|||
Interest expense |
4,101 |
4,855 |
8,049 |
8,895 |
|||
Interest income |
(30) |
(18) |
(46) |
(42) |
|||
Other expense (income), net |
3,770 |
(1,331) |
3,903 |
600 |
|||
Loss before income taxes |
(3,300) |
(2,183) |
(5,729) |
(6,684) |
|||
Income tax expense (benefit) |
959 |
(5) |
1,919 |
(1,368) |
|||
Net loss |
$ (4,259) |
$ (2,178) |
$ (7,648) |
$ (5,316) |
|||
Loss per share: |
|||||||
Basic |
$ (0.11) |
$ (0.06) |
$ (0.19) |
$ (0.14) |
|||
Diluted |
$ (0.11) |
$ (0.06) |
$ (0.19) |
$ (0.14) |
|||
Weighted-average common shares outstanding: |
|||||||
Basic |
40,031 |
38,943 |
39,941 |
38,841 |
|||
Diluted |
40,031 |
38,943 |
39,941 |
38,841 |
|||
Net loss |
$ (4,259) |
$ (2,178) |
$ (7,648) |
$ (5,316) |
|||
Other comprehensive (loss) income: |
|||||||
Foreign currency translation adjustments |
(14,796) |
2,973 |
(18,571) |
(7,317) |
|||
Comprehensive (loss) income |
$ (19,055) |
$ 795 |
$ (26,219) |
$ (12,633) |
|
|||
|
|
||
(Unaudited) |
|||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 40,382 |
$ 55,010 |
|
Trade receivables, net |
57,558 |
53,019 |
|
Other receivables |
7,995 |
5,086 |
|
Inventories, net |
74,318 |
76,971 |
|
Deferred preservation costs, net |
44,785 |
42,863 |
|
Prepaid expenses and other |
15,390 |
14,748 |
|
Total current assets |
240,428 |
247,697 |
|
|
240,939 |
250,000 |
|
Acquired technology, net |
154,866 |
166,994 |
|
Operating lease right-of-use assets, net |
42,659 |
45,714 |
|
Property and equipment, net |
36,268 |
37,521 |
|
Other intangibles, net |
32,470 |
34,502 |
|
Deferred income taxes |
9,916 |
2,357 |
|
Other assets |
7,318 |
8,267 |
|
Total assets |
$ 764,864 |
$ 793,052 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 10,545 |
$ 10,395 |
|
Accrued compensation |
9,732 |
13,163 |
|
Accrued expenses |
7,842 |
7,687 |
|
Taxes payable |
4,709 |
3,634 |
|
Accrued procurement fees |
2,130 |
3,689 |
|
Current maturities of operating leases |
3,207 |
3,149 |
|
Current portion of long-term debt |
1,590 |
1,630 |
|
Other liabilities |
1,891 |
1,606 |
|
Total current liabilities |
41,646 |
44,953 |
|
Long-term debt |
306,941 |
307,493 |
|
Contingent consideration |
44,400 |
49,400 |
|
Non-current maturities of operating leases |
42,141 |
44,869 |
|
Non-current finance lease obligation |
3,766 |
4,374 |
|
Deferred income taxes |
32,609 |
28,799 |
|
Deferred compensation liability |
5,154 |
5,952 |
|
Other liabilities |
6,698 |
6,484 |
|
Total liabilities |
$ 483,355 |
$ 492,324 |
|
Commitments and contingencies |
|||
Shareholders' equity: |
|||
Preferred stock |
— |
— |
|
Common stock (issued shares of 41,744 in 2022 and 41,397 in 2021) |
417 |
414 |
|
Additional paid-in capital |
329,871 |
322,874 |
|
Retained (deficit) earnings |
(5,673) |
1,975 |
|
Accumulated other comprehensive loss |
(28,458) |
(9,887) |
|
|
(14,648) |
(14,648) |
|
Total shareholders' equity |
281,509 |
300,728 |
|
Total liabilities and shareholders' equity |
$ 764,864 |
$ 793,052 |
|
|||
Six Months Ended |
|||
2022 |
2021 |
||
Net cash flows from operating activities: |
|||
Net loss |
$ (7,648) |
$ (5,316) |
|
Adjustments to reconcile net loss to net cash from operating activities: |
|||
Depreciation and amortization |
11,497 |
11,999 |
|
Non-cash compensation |
6,100 |
4,595 |
|
Non-cash lease expense |
3,803 |
3,575 |
|
Write-down of inventories and deferred preservation costs |
2,177 |
2,988 |
|
Change in fair value of contingent consideration |
(5,000) |
4,270 |
|
Deferred income taxes |
(1,611) |
(4,269) |
|
Other |
940 |
2,174 |
|
Changes in operating assets and liabilities: |
|||
Prepaid expenses and other assets |
(205) |
(2,076) |
|
Inventories and deferred preservation costs |
(3,653) |
(11,712) |
|
Receivables |
(9,635) |
(5,454) |
|
Accounts payable, accrued expenses, and other liabilities |
(5,677) |
(1,166) |
|
Net cash flows used in operating activities |
(8,912) |
(392) |
|
Net cash flows from investing activities: |
|||
Capital expenditures |
(4,055) |
(7,249) |
|
Other |
(939) |
205 |
|
Net cash flows used in investing activities |
(4,994) |
(7,044) |
|
Net cash flows from financing activities: |
|||
Proceeds from exercise of stock options and issuance of common stock |
2,318 |
2,321 |
|
Payment of debt issuance costs |
— |
(2,219) |
|
Redemption and repurchase of stock to cover tax withholdings |
(1,739) |
(1,831) |
|
Repayment of term loan |
(1,370) |
(1,405) |
|
Other |
(241) |
(603) |
|
Net cash flows used in financing activities |
(1,032) |
(3,737) |
|
Effect of exchange rate changes on cash and cash equivalents |
310 |
242 |
|
Decrease in cash and cash equivalents |
(14,628) |
(10,931) |
|
Cash and cash equivalents beginning of period |
55,010 |
61,958 |
|
Cash and cash equivalents end of period |
$ 40,382 |
$ 51,027 |
|
|||||||
Three Months Ended |
Six Months Ended |
||||||
2022 |
2021 |
2022 |
2021 |
||||
Products: |
|||||||
Aortic stent grafts |
$ 23,833 |
$ 21,064 |
$ 49,339 |
$ 41,269 |
|||
Surgical sealants |
15,967 |
17,864 |
31,648 |
35,692 |
|||
On-X |
16,255 |
14,726 |
30,626 |
27,821 |
|||
Other |
2,881 |
2,422 |
4,865 |
4,639 |
|||
Total products |
58,936 |
56,076 |
116,478 |
109,421 |
|||
Preservation services |
21,404 |
20,072 |
41,075 |
37,814 |
|||
Total revenues |
$ 80,340 |
$ 76,148 |
$ 157,553 |
$ 147,235 |
|
|||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
2022 |
2021 |
Growth Rate |
2022 |
2021 |
Growth Rate |
||||||
Reconciliation of total revenues, GAAP to total revenues, non-GAAP: |
|||||||||||
Total revenues, GAAP |
$ 80,340 |
$ 76,148 |
6 % |
$ 157,553 |
$ 147,235 |
7 % |
|||||
Impact of changes in currency exchange |
— |
(2,442) |
— |
(4,071) |
|||||||
Total constant currency revenue, non-GAAP |
$ 80,340 |
$ 73,706 |
9 % |
$ 157,553 |
$ 143,164 |
10 % |
Three Months Ended |
Six Months Ended |
||||||
2022 |
2021 |
2022 |
2021 |
||||
Reconciliation of G&A expenses, GAAP to adjusted G&A, non-GAAP: |
|||||||
General, administrative, and marketing expense, GAAP |
$ 38,983 |
$ 40,830 |
$ 77,938 |
$ 79,468 |
|||
Business development, integration, and severance (income) expense |
(3,101) |
3,359 |
(4,680) |
4,829 |
|||
Corporate rebranding expense |
289 |
47 |
1,172 |
62 |
|||
Adjusted G&A, non-GAAP |
$ 41,795 |
$ 37,424 |
$ 81,446 |
$ 74,577 |
|
|||||||
Three Months Ended |
Six Months Ended |
||||||
2022 |
2021 |
2022 |
2021 |
||||
Reconciliation of net loss, GAAP to adjusted EBITDA, non-GAAP: |
|||||||
Net loss, GAAP |
$ (4,259) |
$ (2,178) |
$ (7,648) |
$ (5,316) |
|||
Adjustments: |
|||||||
Depreciation and amortization expense |
5,616 |
5,993 |
11,497 |
11,999 |
|||
Interest expense |
4,101 |
4,855 |
8,049 |
8,895 |
|||
Stock-based compensation expense |
2,934 |
2,115 |
6,100 |
4,595 |
|||
Loss (gain) on foreign currency revaluation |
3,754 |
(1,364) |
3,887 |
522 |
|||
Income tax expense (benefit) |
959 |
(5) |
1,919 |
(1,368) |
|||
Corporate rebranding expense |
289 |
47 |
1,172 |
62 |
|||
Interest income |
(30) |
(18) |
(46) |
(42) |
|||
Business development, integration, and severance (income) expense |
(3,101) |
3,359 |
(4,680) |
4,829 |
|||
Adjusted EBITDA, non-GAAP |
$ 10,263 |
$ 12,804 |
$ 20,250 |
$ 24,176 |
Artivion Inc. and Subsidiaries |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2022 |
2021 |
2022 |
2021 |
||||
GAAP: |
|||||||
Loss before income taxes |
$ (3,300) |
$ (2,183) |
$ (5,729) |
$ (6,684) |
|||
Income tax expense (benefit) |
959 |
(5) |
1,919 |
(1,368) |
|||
Net loss |
$ (4,259) |
$ (2,178) |
$ (7,648) |
$ (5,316) |
|||
Diluted loss per common share |
$ (0.11) |
$ (0.06) |
$ (0.19) |
$ (0.14) |
|||
Diluted weighted-average common shares outstanding |
40,031 |
38,943 |
39,941 |
38,841 |
|||
Reconciliation of loss before income taxes, GAAP to adjusted (loss) income, non-GAAP: |
|||||||
Loss before income taxes, GAAP: |
$ (3,300) |
$ (2,183) |
$ (5,729) |
$ (6,684) |
|||
Adjustments: |
|||||||
Amortization expense |
3,905 |
4,238 |
7,989 |
8,498 |
|||
Corporate rebranding expense |
289 |
47 |
1,172 |
62 |
|||
Non-cash interest expense |
457 |
1,004 |
913 |
1,572 |
|||
Business development, integration, and severance (income) expense |
(3,101) |
3,359 |
(4,680) |
4,829 |
|||
Adjusted (loss) income before income taxes, non-GAAP |
(1,750) |
6,465 |
(335) |
8,277 |
|||
Income tax (benefit) expense calculated at a pro forma tax rate of 25% |
(438) |
1,616 |
(84) |
2,069 |
|||
Adjusted net (loss) income, non-GAAP |
$ (1,312) |
$ 4,849 |
$ (251) |
$ 6,208 |
|||
Reconciliation of diluted loss per common share, GAAP to adjusted diluted (loss) income per common share, non-GAAP: |
|||||||
Diluted loss per common share, GAAP: |
$ (0.11) |
$ (0.06) |
$ (0.19) |
$ (0.14) |
|||
Adjustments: |
|||||||
Amortization expense |
0.10 |
0.11 |
0.20 |
0.22 |
|||
Effect of 25% pro forma tax rate |
0.05 |
0.01 |
0.08 |
0.01 |
|||
Corporate rebranding expense |
0.01 |
— |
0.03 |
— |
|||
Non-cash interest expense |
0.01 |
0.03 |
0.02 |
0.04 |
|||
Tax effect of non-GAAP adjustments |
(0.01) |
(0.05) |
(0.03) |
(0.09) |
|||
Business development, integration, and severance (income) expense |
(0.08) |
0.08 |
(0.12) |
0.12 |
|||
Adjusted diluted (loss) income per common share, non-GAAP |
$ (0.03) |
$ 0.12 |
$ (0.01) |
$ 0.16 |
|||
Reconciliation of diluted weighted-average common shares outstanding GAAP to diluted weighted-average common shares outstanding, non-GAAP: |
|||||||
Diluted weighted-average common shares outstanding, GAAP: |
40,031 |
38,943 |
39,941 |
38,841 |
|||
Adjustments: |
|||||||
Effect of dilutive stock options and awards |
— |
554 |
— |
599 |
|||
Diluted weighted-average common shares outstanding, non-GAAP |
40,031 |
39,497 |
39,941 |
39,440 |
Contacts:
|
|
|
|
Executive Vice President & |
Phone: 332-895-3222 |
Chief Financial Officer |
|
Phone: 770-419-3355 |
View original content to download multimedia:https://www.prnewswire.com/news-releases/artivion-reports-second-quarter-2022-financial-results-301600254.html
SOURCE