Artivion Reports Second Quarter 2023 Financial Results
Second Quarter and Recent Business Highlights:
- Achieved revenue of
$89.3 million in the second quarter of 2023 versus$80.3 million in the second quarter of 2022, an increase of 11% on both a GAAP and non-GAAP constant currency basis - Net loss was
($3.4) million or ($0.08 ) per share; non-GAAP net income was$2.3 million or$0.06 per share - Achieved EBITDA of
$9.2 million in the second quarter of 2023; non-GAAP adjusted EBITDA increased 35% to$13.8 million in the second quarter of 2023 compared to the second quarter of 2022 - Aortic stent graft revenues increased 19% on both a GAAP and non-GAAP constant currency basis in the second quarter of 2023 compared to the second quarter of 2022
- On-X revenues increased 10% on a GAAP basis and 11% on a non-GAAP constant currency basis in the second quarter of 2023 compared to the second quarter of 2022
- Received PerClot PMA approval and commenced shipping product to Baxter
- Patient enrollment in the PERSEVERE clinical trial accelerated with enrollment completion expected in the third quarter of 2023
"Our second quarter results reflect the strength of our business commercially, operationally, and financially. We delivered double-digit constant currency revenue growth year-over-year for the second consecutive quarter and remain on track to achieve or exceed the revenue and EBITDA growth targets for this year. Our exceptional second quarter performance was driven by year-over-year aortic stent graft revenue growth of 19%, On-X revenue growth of 10%, tissue processing growth of 9%, and BioGlue growth of 4%. On a constant currency basis, year-over-year aortic stent graft, On-X, tissue processing, and BioGlue revenue growth were 19%, 11%, 9%, and 4%, respectively. We also saw
Second Quarter 2023 Financial Results
Total revenues for the second quarter of 2023 were
Net loss for the second 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; income tax expense or benefit; corporate rebranding expense; business development, integration, and severance income or expense; non-cash interest expense; gain from sale of non-financial assets, and abandonment of CardioGenesis cardiac laser therapy business. 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 remain on track to achieve or exceed the revenue and EBITDA growth targets for this year; and we are now on a path to meet or exceed our current year guidance, as well as to achieve our 2024 commitments to deliver double-digit compounded annual constant currency revenue growth and adjusted EBITDA in excess of
Condensed Consolidated Statements of Operations and Comprehensive Loss In Thousands, Except Per Share Data (Unaudited) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Revenues: |
|||||||
Products |
$ 66,003 |
$ 58,936 |
$ 128,294 |
$ 116,478 |
|||
Preservation services |
23,248 |
21,404 |
44,186 |
41,075 |
|||
Total revenues |
89,251 |
80,340 |
172,480 |
157,553 |
|||
Cost of products and preservation services: |
|||||||
Products |
20,977 |
18,230 |
40,510 |
35,638 |
|||
Preservation services |
10,190 |
9,938 |
20,159 |
19,024 |
|||
Total cost of products and preservation services |
31,167 |
28,168 |
60,669 |
54,662 |
|||
Gross margin |
58,084 |
52,172 |
111,811 |
102,891 |
|||
Operating expenses: |
|||||||
General, administrative, and marketing |
57,241 |
38,983 |
107,606 |
77,938 |
|||
Research and development |
7,418 |
8,648 |
14,641 |
18,776 |
|||
Total operating expenses |
64,659 |
47,631 |
122,247 |
96,714 |
|||
Gain from sale of non-financial assets |
(14,250) |
— |
(14,250) |
— |
|||
Operating income |
7,675 |
4,541 |
3,814 |
6,177 |
|||
Interest expense |
6,356 |
4,101 |
12,452 |
8,049 |
|||
Interest income |
(265) |
(30) |
(340) |
(46) |
|||
Other expense, net |
4,241 |
3,770 |
3,278 |
3,903 |
|||
Loss before income taxes |
(2,657) |
(3,300) |
(11,576) |
(5,729) |
|||
Income tax expense |
725 |
959 |
5,338 |
1,919 |
|||
Net loss |
$ (3,382) |
$ (4,259) |
$ (16,914) |
$ (7,648) |
|||
Loss per share: |
|||||||
Basic |
$ (0.08) |
$ (0.11) |
$ (0.41) |
$ (0.19) |
|||
Diluted |
$ (0.08) |
$ (0.11) |
$ (0.41) |
$ (0.19) |
|||
Weighted-average common shares outstanding: |
|||||||
Basic |
40,755 |
40,031 |
40,595 |
39,941 |
|||
Diluted |
40,755 |
40,031 |
40,595 |
39,941 |
|||
Net loss |
$ (3,382) |
$ (4,259) |
$ (16,914) |
$ (7,648) |
|||
Other comprehensive loss: |
|||||||
Foreign currency translation adjustments |
1,826 |
(14,796) |
5,442 |
(18,571) |
|||
Comprehensive loss |
$ (1,556) |
$ (19,055) |
$ (11,472) |
$ (26,219) |
Condensed Consolidated Balance Sheets In Thousands |
|||
|
|
||
(Unaudited) |
|||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 48,775 |
$ 39,351 |
|
Trade receivables, net |
64,806 |
61,820 |
|
Other receivables |
4,450 |
7,764 |
|
Inventories, net |
78,458 |
74,478 |
|
Deferred preservation costs, net |
48,302 |
46,371 |
|
Prepaid expenses and other |
19,107 |
17,550 |
|
Total current assets |
263,898 |
247,334 |
|
|
245,561 |
243,631 |
|
Acquired technology, net |
147,029 |
151,263 |
|
Operating lease right-of-use assets, net |
40,825 |
41,859 |
|
Property and equipment, net |
38,389 |
38,674 |
|
Other intangibles, net |
29,966 |
31,384 |
|
Deferred income taxes |
3,951 |
1,314 |
|
Other assets |
8,242 |
7,339 |
|
Total assets |
$ 777,861 |
$ 762,798 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 10,455 |
$ 12,004 |
|
Accrued expenses |
10,365 |
12,374 |
|
Accrued compensation |
12,792 |
13,810 |
|
Taxes payable |
10,641 |
2,635 |
|
Current maturities of operating leases |
4,037 |
3,308 |
|
Accrued procurement fees |
1,744 |
2,111 |
|
Current portion of long-term debt |
1,561 |
1,608 |
|
Other liabilities |
4,635 |
1,825 |
|
Total current liabilities |
56,230 |
49,675 |
|
Long-term debt |
306,109 |
306,499 |
|
Contingent consideration |
56,100 |
40,400 |
|
Non-current maturities of operating leases |
39,989 |
41,257 |
|
Deferred income taxes |
19,469 |
24,499 |
|
Deferred compensation liability |
6,541 |
5,468 |
|
Non-current finance lease obligation |
3,446 |
3,644 |
|
Other liabilities |
7,469 |
7,027 |
|
Total liabilities |
$ 495,353 |
$ 478,469 |
|
Commitments and contingencies |
|||
Shareholders' equity: |
|||
Preferred stock |
— |
— |
|
Common stock (75,000 shares authorized, 42,443 and 41,830 shares issued and outstanding in |
424 |
418 |
|
Additional paid-in capital |
347,030 |
337,385 |
|
Retained deficit |
(34,131) |
(17,217) |
|
Accumulated other comprehensive loss |
(16,167) |
(21,609) |
|
|
(14,648) |
(14,648) |
|
Total shareholders' equity |
282,508 |
284,329 |
|
Total liabilities and shareholders' equity |
$ 777,861 |
$ 762,798 |
Condensed Consolidated Statement of Cash Flows In Thousands (Unaudited) |
|||
Six Months Ended |
|||
2023 |
2022 |
||
Net cash flows from operating activities: |
|||
Net loss |
$ (16,914) |
$ (7,648) |
|
Adjustments to reconcile net loss to net cash from operating activities: |
|||
Change in fair value of contingent consideration |
15,700 |
(5,000) |
|
Depreciation and amortization |
11,501 |
11,497 |
|
Non-cash compensation |
7,279 |
6,100 |
|
Fair value adjustment of long-term loan |
5,000 |
— |
|
Non-cash lease expense |
3,631 |
3,803 |
|
Write-down of inventories and deferred preservation costs |
2,021 |
2,177 |
|
Deferred income taxes |
(8,073) |
(1,611) |
|
Gain from sale of non-financial assets |
(14,250) |
— |
|
Other |
1,836 |
940 |
|
Changes in operating assets and liabilities: |
|||
Accounts payable, accrued expenses, and other liabilities |
1,607 |
(5,677) |
|
Receivables |
655 |
(9,635) |
|
Prepaid expenses and other assets |
(2,317) |
(205) |
|
Inventories and deferred preservation costs |
(6,921) |
(3,653) |
|
Net cash flows provided by (used in) operating activities |
755 |
(8,912) |
|
Net cash flows from investing activities: |
|||
Proceeds from sale of non-financial assets, net |
14,250 |
— |
|
Capital expenditures |
(4,029) |
(4,055) |
|
Payments for Endospan Agreement |
(5,000) |
— |
|
Other |
(986) |
(939) |
|
Net cash flows provided by (used in) investing activities |
4,235 |
(4,994) |
|
Net cash flows from financing activities: |
|||
Proceeds from financing insurance premiums |
3,558 |
— |
|
Proceeds from exercise of stock options and issuance of common stock |
2,581 |
2,318 |
|
Principal payments on short-term notes payable |
(529) |
— |
|
Redemption and repurchase of stock to cover tax withholdings |
(563) |
(1,739) |
|
Repayment of term loan |
(1,381) |
(1,370) |
|
Other |
(262) |
(241) |
|
Net cash flows provided by (used in) financing activities |
3,404 |
(1,032) |
|
Effect of exchange rate changes on cash and cash equivalents |
1,030 |
310 |
|
Increase (decrease) in cash and cash equivalents |
9,424 |
(14,628) |
|
Cash and cash equivalents beginning of period |
39,351 |
55,010 |
|
Cash and cash equivalents end of period |
$ 48,775 |
$ 40,382 |
Financial Highlights In Thousands (Unaudited) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Products: |
|||||||
Aortic stent grafts |
$ 28,359 |
$ 23,833 |
$ 54,509 |
$ 49,339 |
|||
On-X |
17,946 |
16,255 |
35,602 |
30,626 |
|||
Surgical sealants |
16,566 |
15,967 |
33,269 |
31,648 |
|||
Other |
3,132 |
2,881 |
4,914 |
4,865 |
|||
Total products |
66,003 |
58,936 |
128,294 |
116,478 |
|||
Preservation services |
23,248 |
21,404 |
44,186 |
41,075 |
|||
Total revenues |
$ 89,251 |
$ 80,340 |
$ 172,480 |
$ 157,553 |
|||
Revenues: |
|||||||
US |
$ 44,425 |
$ 40,953 |
$ 85,758 |
$ 78,688 |
|||
International |
44,826 |
39,387 |
$ 86,722 |
78,865 |
|||
Total revenues |
$ 89,251 |
$ 80,340 |
$ 172,480 |
$ 157,553 |
Reconciliation of GAAP to Non-GAAP Revenues and General, Administrative, and Marketing Expense In Thousands (Unaudited) |
|||||||||
Revenues for the Three Months Ended |
Percent Change From Prior Year |
||||||||
2023 |
2022 |
||||||||
US GAAP |
US GAAP |
Exchange |
Constant |
Constant |
|||||
Products: |
|||||||||
Aortic stent grafts |
$ 28,359 |
$ 23,833 |
29 |
$ 23,862 |
19 % |
||||
On-X |
17,946 |
16,255 |
(72) |
16,183 |
11 % |
||||
Surgical sealants |
16,566 |
15,967 |
(69) |
15,898 |
4 % |
||||
Other |
3,132 |
2,881 |
(4) |
2,877 |
9 % |
||||
Total products |
66,003 |
58,936 |
(116) |
58,820 |
12 % |
||||
Preservation services |
23,248 |
21,404 |
(34) |
21,370 |
9 % |
||||
Total |
$ 89,251 |
$ 80,340 |
$ (150) |
$ 80,190 |
11 % |
Revenues for the Six Months Ended |
Percent Change From Prior Year |
||||||||
2023 |
2022 |
||||||||
US GAAP |
US GAAP |
Exchange |
Constant |
Constant |
|||||
Products: |
|||||||||
Aortic stent grafts |
$ 54,509 |
$ 49,339 |
(1,209) |
$ 48,130 |
13 % |
||||
On-X |
35,602 |
30,626 |
(219) |
30,407 |
17 % |
||||
Surgical sealants |
33,269 |
31,648 |
(354) |
31,294 |
6 % |
||||
Other |
4,914 |
4,865 |
(19) |
4,846 |
1 % |
||||
Total products |
128,294 |
116,478 |
(1,801) |
114,677 |
12 % |
||||
Preservation services |
44,186 |
41,075 |
(69) |
41,006 |
8 % |
||||
Total |
$ 172,480 |
$ 157,553 |
$ (1,870) |
$ 155,683 |
11 % |
Three Months Ended |
Six Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Reconciliation of G&A expense, GAAP to adjusted G&A, non-GAAP: |
|||||||
General, administrative, and marketing expense, GAAP |
$ 57,241 |
$ 38,983 |
$ 107,606 |
$ 77,938 |
|||
Business development, integration, and severance expense (income) |
11,101 |
(3,101) |
16,098 |
(4,680) |
|||
Corporate rebranding expense |
69 |
289 |
218 |
1,172 |
|||
Abandonment of CardioGenesis cardiac laser therapy business |
160 |
— |
160 |
— |
|||
Adjusted G&A, non-GAAP |
$ 45,911 |
$ 41,795 |
$ 91,130 |
$ 81,446 |
Reconciliation of GAAP to Non-GAAP Adjusted EBITDA In Thousands (Unaudited) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Reconciliation of net loss, GAAP to adjusted EBITDA, non-GAAP: |
|||||||
Net loss, GAAP |
$ (3,382) |
$ (4,259) |
$ (16,914) |
$ (7,648) |
|||
Adjustments: |
|||||||
Business development, integration, and severance expense (income) |
15,270 |
(3,101) |
20,722 |
(4,680) |
|||
Interest expense |
6,356 |
4,101 |
12,452 |
8,049 |
|||
Depreciation and amortization expense |
5,767 |
5,616 |
11,501 |
11,497 |
|||
Stock-based compensation expense |
3,938 |
2,934 |
7,279 |
6,100 |
|||
Income tax expense |
725 |
959 |
5,338 |
1,919 |
|||
Abandonment of CardioGenesis cardiac laser therapy business |
390 |
— |
390 |
— |
|||
Corporate rebranding expense |
69 |
289 |
218 |
1,172 |
|||
Interest income |
(265) |
(30) |
(340) |
(46) |
|||
(Gain) loss on foreign currency revaluation |
(797) |
3,754 |
(1,770) |
3,887 |
|||
Gain from sale of non-financial assets |
(14,250) |
— |
(14,250) |
— |
|||
Adjusted EBITDA, non-GAAP |
$ 13,821 |
$ 10,263 |
$ 24,626 |
$ 20,250 |
Artivion Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Net Income and Diluted Income Per Common Share In Thousands, Except Per Share Data (Unaudited) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
GAAP: |
|||||||
Loss before income taxes |
$ (2,657) |
$ (3,300) |
$ (11,576) |
$ (5,729) |
|||
Income tax expense |
725 |
959 |
5,338 |
1,919 |
|||
Net loss |
$ (3,382) |
$ (4,259) |
$ (16,914) |
$ (7,648) |
|||
Diluted loss per common share |
$ (0.08) |
$ (0.11) |
$ (0.41) |
$ (0.19) |
|||
Diluted weighted-average common shares outstanding |
40,755 |
40,031 |
40,595 |
39,941 |
|||
Reconciliation of loss before income taxes, GAAP to adjusted income |
|||||||
Loss before income taxes, GAAP: |
$ (2,657) |
$ (3,300) |
$ (11,576) |
$ (5,729) |
|||
Adjustments: |
|||||||
Business development, integration, and severance expense (income) |
15,270 |
(3,101) |
20,722 |
(4,680) |
|||
Amortization expense |
3,806 |
3,905 |
7,687 |
7,989 |
|||
Non-cash interest expense |
464 |
457 |
926 |
913 |
|||
Abandonment of CardioGenesis cardiac laser therapy business |
390 |
— |
390 |
— |
|||
Corporate rebranding expense |
69 |
289 |
218 |
1,172 |
|||
Gain from sale of non-financial assets |
(14,250) |
— |
(14,250) |
— |
|||
Adjusted income (loss) before income taxes, non-GAAP |
3,092 |
(1,750) |
4,117 |
(335) |
|||
Income tax expense (benefit) calculated at a tax rate of 25% |
773 |
(438) |
1,029 |
(84) |
|||
Adjusted net income (loss), non-GAAP |
$ 2,319 |
$ (1,312) |
$ 3,088 |
$ (251) |
|||
Reconciliation of diluted loss per common share, GAAP to adjusted |
|||||||
Diluted loss per common share, GAAP: |
$ (0.08) |
$ (0.11) |
$ (0.41) |
$ (0.19) |
|||
Adjustments: |
|||||||
Business development, integration, and severance expense (income) |
0.37 |
(0.08) |
0.50 |
(0.12) |
|||
Effect of 25% tax rate |
0.03 |
0.05 |
0.20 |
0.08 |
|||
Amortization expense |
0.09 |
0.10 |
0.19 |
0.20 |
|||
Non-cash interest expense |
0.01 |
0.01 |
0.02 |
0.02 |
|||
Abandonment of CardioGenesis cardiac laser therapy business |
0.01 |
— |
0.01 |
— |
|||
Corporate rebranding expense |
— |
0.01 |
0.01 |
0.03 |
|||
Tax effect of non-GAAP adjustments |
(0.03) |
(0.01) |
(0.10) |
(0.03) |
|||
Gain from sale of non-financial assets |
(0.34) |
— |
(0.34) |
— |
|||
Adjusted diluted income (loss) per common share, non-GAAP |
$ 0.06 |
$ (0.03) |
$ 0.08 |
$ (0.01) |
|||
Reconciliation of diluted weighted-average common shares outstanding |
|||||||
Diluted weighted-average common shares outstanding, GAAP: |
40,755 |
40,031 |
40,595 |
39,941 |
|||
Adjustments: |
|||||||
Effect of dilutive stock options and awards |
419 |
— |
444 |
— |
|||
Diluted weighted-average common shares outstanding, non-GAAP |
41,174 |
40,031 |
41,039 |
39,941 |
D. Ashley Lee Executive Vice President & Chief Financial Officer Phone: 770-419-3355 |
Phone: 332-895-3222 |
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