aort-20220217x8k
false000078419900007841992022-02-172022-02-17

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________

FORM 8-K

___________________________________________

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 17, 2022
___________________________________________

ARTIVION, INC.

(Exact name of registrant as specified in its charter)
___________________________________________

Delaware

1-13165

59-2417093

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

1655 Roberts Boulevard, N.W., Kennesaw, Georgia 30144
(Address of principal executive office) (zip code)

Registrant's telephone number, including area code: (770) 419-3355

_________________________________________________________

(Former name or former address, if changed since last report)

Title of each class

Trading Symbol(s)

Name of each exchange
on which registered

Common Stock, $0.01 par value

AORT

NYSE

___________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨



Item 2.02Results of Operations and Financial Condition

On February 17, 2022, Artivion, Inc. (“Artivion” or the “Company”) issued a press release announcing its financial results for the quarter ended December 31, 2021. Artivion hereby incorporates by reference herein the information set forth in its press release dated February 17, 2022, a copy of which is attached hereto as Exhibit 99.1. Except as otherwise provided in the press release, the press release speaks only as of the date of such press release and it shall not create any implication that the affairs of Artivion have continued unchanged since such date.

The information provided pursuant to this Item 2.02 is to be considered “furnished” pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, nor shall it be deemed incorporated by reference into any of Artivion’s reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing.

Except for the historical information contained in this report, the statements made by Artivion are forward-looking statements that involve risks and uncertainties. All such statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Artivion’s future financial performance could differ significantly from the expectations of management and from results expressed or implied in the press release. Please refer to the last paragraph of the text portion of the press release for further discussion about forward-looking statements. For further information on risk factors, please refer to “Risk Factors” contained in Artivion’s most recently filed Form 10-K and its subsequent filings with the Securities and Exchange Commission, as well as in the press release attached as Exhibit 99.1 hereto. Artivion disclaims any obligation or duty to update or modify these forward-looking statements.

Item 9.01(d)

Exhibits

 

(d)

Exhibits.

Exhibit Number

Description

99.1*

Press Release dated February 17, 2022

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Furnished herewith, not filed.


-2-


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Artivion, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 17, 2022

ARTIVION, INC.

By:

/s/ D. Ashley Lee

Name:

D. Ashley Lee

Title:

Executive Vice President, Chief

Operating Officer and Chief

Financial Officer

-3-

Exhibit 99.1

Exhibit 99.1

 

 

Picture 1

Picture 2



FOR IMMEDIATE RELEASE




Contacts:





 

Artivion

D. Ashley Lee

Executive Vice President, Chief Financial Officer and

Chief Operating Officer

Phone: 770-419-3355

Gilmartin Group LLC

Brian Johnston / Lynn Lewis

Phone:  332-895-3222

investors@artivion.com





Artivion Reports Fourth Quarter and Full Year 2021 Financial Results 



Fourth Quarter and Recent Business Highlights:

·

Achieved record revenue of $79.4 million in the fourth quarter 2021 versus $67.9 million in the fourth quarter of 2020, an increase of 16.9% on a GAAP basis and 18.8 % on a non-GAAP proforma constant currency basis

·

Received FDA approval to launch enrollment in AMDS clinical trial

·

Filed PMA with FDA for US PerClot Approval in October 2021



ATLANTA, GA – (February 17, 2022) – Artivion, Inc. (NYSE: AORT), a leading cardiac and vascular surgery company focused on aortic disease, today announced its financial results for the fourth quarter and full year ended December 31, 2021.



“In the fourth quarter we achieved record quarterly revenues, driven by our aortic stent grafts and continued strength in our US On-X aortic valve business. We also saw meaningful growth across APAC and LATAM as we continue to expand our commercial footprint and secure additional regulatory approvals in those regions,” said Pat Mackin, Chairman, President, and Chief Executive Officer.



“In addition to our commercial and regulatory success, we also continued to advance our product pipeline, which is expected to drive growth in both the near and longer terms. We believe we are on track to receive FDA PMA approval for PROACT Mitral and for PerClot this year. Meanwhile, we have made significant progress with enrollment in our PROACT Xa trial and have advanced several other programs that are expected to deliver incremental growth beginning in 2025.”



“Despite the unprecedented challenges due to the COVID-19 pandemic, we were able to execute on our key initiatives. We expect that momentum to continue as reflected in our positive financial outlook. The rollout of our new corporate branding is timely as we are now firmly established in the marketplace as an innovator and leader in the treatment of aortic repair.”

 



Page 1 of 9


 

Fourth Quarter 2021 Financial Results

Total revenues for the fourth quarter of 2021 were $79.4 million, reflecting an increase of 16.9% on a GAAP basis and 18.8% on a non-GAAP proforma constant currency basis, both compared to the fourth quarter of 2020.



Net loss for the fourth quarter of 2021 was ($20.1) million, or ($0.51) per fully diluted common share, compared to net loss of ($3.5) million, or ($0.09) per fully diluted common share for the fourth quarter of 2020. Non-GAAP net loss for the fourth quarter of 2021 was ($141,000), or ($0.00) per fully diluted common share, compared to non-GAAP net income of $7.9 million, or $0.20 per fully diluted common share for the fourth quarter of 2020. GAAP net loss for the fourth quarter of 2021 includes pretax expense of $10.4 million for business development expenses primarily related to non-cash charges from the Ascyrus and Endospan transactions and $2.4 million of losses due to foreign currency.



Full Year 2021 Financial Results

Total revenues for 2021 were $298.8 million, reflecting an increase of 18.0% on a GAAP basis and 15.8% on a non-GAAP proforma constant currency basis compared to the full year of 2020.



Net loss for 2021 was ($14.8) million, or ($0.38) per fully diluted common share, compared to net loss of ($16.7) million, or ($0.44) per fully diluted common share for the full year of 2020. Non-GAAP net income for the full year of 2021 was $4.9 million, or $0.12 per fully diluted common share, compared to non-GAAP net income of $9.7 million, or $0.25 per fully diluted common share for the full year of 2020. GAAP net loss for the full year of 2021 includes pretax expense of $16.6 million for business development expenses primarily related to non-cash charges from the Ascyrus and Endospan transactions and $5.5 million of losses due to foreign currency, partially offset by a pretax gain of $15.9 million resulting from the sale of our PerClot product line.



The independent registered public accounting firm's audit report with respect to the Company's fiscal year-end financial statements will not be issued until the Company completes its annual report on Form 10-K. Accordingly, the financial results reported in this earnings release are preliminary pending completion of the audit and the Company’s filing of its annual report on Form 10-K.



2022 Financial Outlook 

Artivion expects constant currency revenue growth of between 9.0% and 11.0% for the full year 2022 compared to the full year 2021. Assuming a Euro/USD exchange rate of 1.13 and the related 2%, or approximately $6.0 million revenue headwind compared to 2021, revenues are expected to be in the range of $319.0 million to $325.0 million. 



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, non-GAAP general, administrative, and marketing, and non-GAAP adjusted operating income. 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 revenues of acquired and divested product lines and the impact of changes in currency exchange. The Company’s non-GAAP net income; non-GAAP EBITDA;  non-GAAP general, administrative, and marketing;  and non-GAAP adjusted operating income results exclude (as applicable) business development, integration, and severance expense; gain from sale of non-financial assets; depreciation and amortization expense; interest income and expense; non-cash interest expense; loss (gain) on foreign

Page 2 of 12

 


 

currency revaluation; stock-based compensation expense; corporate rebranding expense; and income tax expense (benefit). 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 acquisitions, or 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 acquired and divested product lines and 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, February 17, 2022 at 4:30 p.m. ET to discuss the results, followed by a question and answer session. To participate in the conference call dial 201-689-8261 a few minutes prior to 4:30 p.m. ET. The teleconference replay will be available approximately one hour following the completion of the event and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The conference number for the replay is 13725524.



The live webcast and replay can be accessed by going to the Investors section of the Artivion website at www.Artivion.com and selecting the heading Webcasts & Presentations.



About Artivion, Inc.

Headquartered in suburban Atlanta, Georgia, Artivion, Inc. is a medical device company focused on developing simple, elegant solutions that address cardiac and vascular surgeons’ most difficult challenges in treating patients with aortic diseases. Artivion’s four major groups of products include: aortic stents and stent grafts, surgical sealants, On-X mechanical heart valves, and implantable cardiac and vascular human tissues. Artivion markets and sells products in more than 100 countries worldwide. For additional information about Artivion, visit our website, www.artivion.com.  



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 product pipeline to drive growth in both the near and longer terms; we are on track to receive FDA PMA approval for PROACT Mitral and for PerClot this year; we have made significant progress with enrollment in our PROACT Xa trial and have advanced several other programs that are expected to deliver incremental growth beginning in 2025; we expect our momentum gained as a result of executing on our key initiatives to continue as reflected in our positive financial outlook; and that we believe the rollout of our new corporate branding firmly establishes us in the marketplace as an innovator and leader in the treatment of aortic repair. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ

Page 3 of 12

 


 

materially from current expectations, including that the benefits anticipated from the Ascyrus Medical LLC transaction and Endospan agreements may not be achieved; the benefits anticipated from our clinical trials may not be achieved or achieved on our anticipated timeline; our existing products may not be able to consistently retain their existing regulatory approvals; products in our pipeline may not receive regulatory approval or receive regulatory approval on our anticipated timelines; our products that obtain regulatory approval may not be adopted by the market as much as we anticipate or at all;  and the continued effects of COVID-19, including new COVID-19 variants, hospital staffing shortages, decelerating vaccination or vaccine adoption rates, or government mandates implemented to address the effects of the pandemic, could adversely impact our results.  These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for year ended December 31, 2021. Artivion does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.











Page 4 of 12

 


 





Artivion, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share data)













 

 

 

 

 

 

 

 

 

 

 



(Unaudited)

 

 

 

 

 



Three Months Ended

 

Twelve Months Ended



December 31,

 

December 31,



 

2021

 

 

2020

 

 

2021

 

 

2020

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Products

$

59,069 

 

$

50,502 

 

$

221,597 

 

$

179,299 

Preservation services

 

20,325 

 

 

17,394 

 

 

77,239 

 

 

73,928 

Total revenues

 

79,394 

 

 

67,896 

 

 

298,836 

 

 

253,227 



 

 

 

 

 

 

 

 

 

 

 

Cost of products and preservation services:

 

 

 

 

 

 

 

 

 

 

 

Products

 

18,604 

 

 

14,050 

 

 

65,196 

 

 

50,128 

Preservation services

 

9,416 

 

 

9,255 

 

 

36,126 

 

 

35,315 

Total cost of products and preservation services

 

28,020 

 

 

23,305 

 

 

101,322 

 

 

85,443 



 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

51,374 

 

 

44,591 

 

 

197,514 

 

 

167,784 



 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

General, administrative, and marketing

 

51,253 

 

 

36,103 

 

 

169,774 

 

 

141,136 

Research and development

 

9,460 

 

 

6,574 

 

 

35,546 

 

 

24,207 

Total operating expenses

 

60,713 

 

 

42,677 

 

 

205,320 

 

 

165,343 

Gain from sale of non-financial assets

 

--

 

 

--

 

 

(15,923)

 

 

--



 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(9,339)

 

 

1,914 

 

 

8,117 

 

 

2,441 



 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

3,892 

 

 

4,718 

 

 

16,887 

 

 

16,698 

Interest income

 

(19)

 

 

(36)

 

 

(79)

 

 

(217)

Other expense (income), net

 

2,875 

 

 

(2,676)

 

 

6,136 

 

 

3,134 



 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(16,087)

 

 

(92)

 

 

(14,827)

 

 

(17,174)

Income tax expense (benefit)

 

4,013 

 

 

3,366 

 

 

 

 

(492)



 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(20,100)

 

$

(3,458)

 

$

(14,834)

 

$

(16,682)



 

 

 

 

 

 

 

 

 

 

 

Loss per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.51)

 

 

(0.09)

 

$

(0.38)

 

$

(0.44)

Diluted

$

(0.51)

 

 

(0.09)

 

$

(0.38)

 

$

(0.44)



 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

39,161 

 

 

38,613 

 

 

38,983 

 

 

37,861 

Diluted

 

39,161 

 

 

38,613 

 

 

38,983 

 

 

37,861 

Page 5 of 12

 


 

Artivion, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)







 

 

 

 

 



December 31,



2021

 

2020

ASSETS

 

 

 

 

 



 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

55,010 

 

$

61,412 

Restricted securities

 

--

 

 

546 

Trade receivables, net

 

53,019 

 

 

45,964 

Other receivables

 

5,086 

 

 

2,788 

Inventories, net

 

76,971 

 

 

73,038 

Deferred preservation costs, net

 

42,863 

 

 

36,546 

Prepaid expenses and other

 

14,748 

 

 

14,295 

Total current assets

 

247,697 

 

 

234,589 



 

 

 

 

 

Goodwill

 

250,000 

 

 

260,061 

Acquired technology, net

 

166,994 

 

 

186,091 

Operating lease right-of-use assets, net

 

45,714 

 

 

18,571 

Property and equipment, net

 

37,521 

 

 

33,077 

Other intangibles, net

 

34,502 

 

 

40,966 

Deferred income taxes

 

2,357 

 

 

1,446 

Other long-term assets

 

8,267 

 

 

14,603 



 

 

 

 

 

Total assets

$

793,052 

 

$

789,404 



Page 6 of 12

 


 

Artivion, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)









 

 

 

 

 



December 31,



2021

 

2020

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 



 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

10,395 

 

$

9,623 

Accrued expenses

 

7,687 

 

 

7,472 

Accrued compensation

 

13,163 

 

 

10,192 

Taxes payable

 

3,634 

 

 

2,808 

Accrued procurement fees

 

3,689 

 

 

3,619 

Current portion of finance lease obligation

 

528 

 

 

614 

Current maturities of operating leases

 

3,149 

 

 

5,763 

Current portion of long-term debt

 

1,630 

 

 

1,195 

Current portion of contingent consideration

 

--

 

 

16,430 

Other

 

1,078 

 

 

2,752 



 

 

 

 

 

Total current liabilities

 

44,953 

 

 

60,468 



 

 

 

 

 

Long-term debt

 

307,493 

 

 

290,468 

Contingent consideration

 

49,400 

 

 

43,500 

Non-current maturities of operating leases

 

44,869 

 

 

14,034 

Non-current finance lease obligations

 

4,374 

 

 

5,300 

Deferred income taxes

 

28,799 

 

 

34,713 

Deferred compensation liability

 

5,952 

 

 

5,518 

Other

 

6,484 

 

 

6,690 



 

 

 

 

 

Total liabilities

 

492,324 

 

 

460,691 



 

 

 

 

 

Commitments and contingencies

 

 

 

 

 



 

 

 

 

 

Shareholders' equity:

 

 

 

 

 



 

 

 

 

 

Preferred stock $0.01 par value per share, 5,000 shares authorized, no shares issued

 

--

 

 

--

Common stock $0.01 par value per share, 75,000 shares authorized,

 

 

 

 

 

41,397 and 40,394 shares issued as of December 31, 2021 and 2020, respectively

 

414 

 

 

404 

Additional paid-in capital

 

322,874 

 

 

316,192 

Retained earnings

 

1,975 

 

 

20,022 

Accumulated other comprehensive (loss) income

 

(9,887)

 

 

6,743 

Treasury stock at cost, 1,487 shares as of December 31, 2021 and 2020

 

(14,648)

 

 

(14,648)



 

 

 

 

 

Total shareholders' equity

 

300,728 

 

 

328,713 



 

 

 

 

 

Total liabilities and shareholders' equity

$

793,052 

 

$

789,404 



Page 7 of 12

 


 













Artivion, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

(In thousands)









 

 

 

 

 

 

 

 



 

 

 

 



Year Ended December 31,



2021

 

2020

 

2019



 

 

 

 

 

 

 

 

Net cash flows from operating activities:

 

 

 

 

 

 

 

 

Net (loss) income

$

(14,834)

 

$

(16,682)

 

$

1,720 



 

 

 

 

 

 

 

 

Adjustments to reconcile net (loss) income to net cash from operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

23,977 

 

 

20,712 

 

 

18,317 

Non-cash compensation

 

10,711 

 

 

6,912 

 

 

8,799 

Change in fair value of contingent consideration

 

8,870 

 

 

4,523 

 

 

--

Non-cash lease expense

 

7,521 

 

 

7,145 

 

 

5,009 

Write-down of inventories and deferred preservation costs

 

5,377 

 

 

3,443 

 

 

1,488 

Write-off of Endospan Option 

 

4,944 

 

 

--

 

 

--

Non-cash interest expense

 

2,005 

 

 

3,656 

 

 

1,631 

Change in fair value of long-term loan receivable

 

409 

 

 

4,949 

 

 

--

Deferred income taxes

 

(4,470)

 

 

4,283 

 

 

(2,305)

Gain on sale of non-financial assets

 

(15,923)

 

 

--

 

 

--

Other

 

2,060 

 

 

124 

 

 

551 



 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

(1,404)

 

 

(2,720)

 

 

(6,177)

Accounts payable, accrued expenses, and other liabilities

 

(1,893)

 

 

(9,157)

 

 

251 

Receivables

 

(11,560)

 

 

9,938 

 

 

(5,332)

Inventories and deferred preservation costs

 

(18,375)

 

 

(24,757)

 

 

(8,125)

Net cash flows (used in) provided by operating activities

 

(2,585)

 

 

12,369 

 

 

15,827 



 

 

 

 

 

 

 

 

Net cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of non-financial assets, net

 

19,000 

 

 

--

 

 

--

Ascyrus Acquisition, net of cash acquired

 

--

 

 

(59,119)

 

 

--

Payments for Endospan agreement

 

--

 

 

(5,000)

 

 

(15,000)

Capital expenditures

 

(13,091)

 

 

(7,328)

 

 

(8,072)

Other

 

(249)

 

 

(1,681)

 

 

(871)

Net cash flows provided by (used in) investing activities

 

5,660 

 

 

(73,128)

 

 

(23,943)



 

 

 

 

 

 

 

 

Net cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options and issuance of common stock

 

3,756 

 

 

2,432 

 

 

4,758 

Proceeds from issuance of convertible debt

 

--

 

 

100,000 

 

 

--

Proceeds from revolving line of credit

 

--

 

 

30,000 

 

 

--

Proceeds from financing insurance premiums

 

--

 

 

2,815 

 

 

--

Repayment of revolving line of credit

 

--

 

 

(30,000)

 

 

--

Redemption and repurchase of stock to cover tax withholdings

 

(1,914)

 

 

(1,995)

 

 

(2,743)

Payment of debt issuance costs

 

(2,219)

 

 

(3,647)

 

 

--

Repayment of debt

 

(3,085)

 

 

(5,346)

 

 

(2,780)

Payment of contingent consideration

 

(8,200)

 

 

--

 

 

--

Other

 

(561)

 

 

(651)

 

 

(728)

Net cash flows (used in) provided by financing activities

 

(12,223)

 

 

93,608 

 

 

(1,493)



 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents, and restricted securities

 

2,200 

 

 

(5,185)

 

 

1,667 

(Decrease) increase in cash, cash equivalents, and restricted securities

 

(6,948)

 

 

27,664 

 

 

(7,942)



 

 

 

 

 

 

 

 

Cash, cash equivalents, and restricted securities, beginning of year

 

61,958 

 

 

34,294 

 

 

42,236 

Cash, cash equivalents, and restricted securities, end of year

$

55,010 

 

$

61,958 

 

$

34,294 

















Page 8 of 12

 


 

Artivion, Inc. and Subsidiaries

Financial Highlights

(In thousands)









 

 

 

 

 

 

 

 

 

 

 



(Unaudited)

 

(Unaudited)



Three Months Ended

 

Twelve Months Ended



December 31,

 

December 31,



2021

 

2020

 

2021

 

2020

Products:

 

 

 

 

 

 

 

 

 

 

 

Aortic stents and stent grafts

$

23,222 

 

$

17,731 

 

$

85,387 

 

$

61,663 

Surgical sealants

 

18,478 

 

 

17,083 

 

 

70,714 

 

 

62,068 

On-X

 

15,520 

 

 

13,668 

 

 

57,363 

 

 

48,053 

Other

 

1,849 

 

 

2,020 

 

 

8,133 

 

 

7,515 

         Total products

 

59,069 

 

 

50,502 

 

 

221,597 

 

 

179,299 



 

 

 

 

 

 

 

 

 

 

 

Preservation services

 

20,325 

 

 

17,394 

 

 

77,239 

 

 

73,928 



 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

79,394 

 

$

67,896 

 

$

298,836 

 

$

253,227 



 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

U.S.

$

39,622 

 

$

35,103 

 

$

151,151 

 

$

138,274 

International

 

39,772 

 

 

32,793 

 

 

147,685 

 

 

114,953 

Total revenues

$

79,394 

 

$

67,896 

 

$

298,836 

 

$

253,227 



Page 9 of 12

 


 

Artivion, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Revenues and General Administrative, and Marketing Expense 

(In thousands, except per share data)







 

 

 

 

 

 

 

 

 

 

 

 

 



(Unaudited)

 

(Unaudited)



Three Months Ended

 

Twelve Months Ended



December 31,

 

December 31,



2021

 

2020

Growth Rate

 

2021

 

2020

Growth Rate

Reconciliation of total revenues, GAAP to

 

 

 

 

 

 

 

 

 

 

 

 

 

total revenues, non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues, GAAP

$

79,394 

 

$

67,896 

16.9%

 

$

298,836 

 

$

253,227 

18.0%

Including AMDS prior to acquisition  

 

--

 

 

--

 

 

 

--

 

 

2,088 

 

Excluding PerClot post sale

 

--

 

 

(801)

 

 

 

--

 

 

(1,299)

 

Impact of changes in currency exchange

 

--

 

 

(283)

 

 

 

--

 

 

4,088 

 

Total proforma constant currency revenue, non-GAAP

$

79,394 

 

$

66,812 

18.8%

 

$

298,836 

 

$

258,104 

15.8%







 

 

 

 

 

 

 

 

 

 

 

 



(Unaudited)

 

 

(Unaudited)



Three Months Ended

 

 

Twelve Months Ended



December 31,

 

 

December 31,



2021

 

2020

 

 

2021

 

2020

Reconciliation of G&A expenses, GAAP to

 

 

 

 

 

 

 

 

 

 

 

 

adjusted G&A, non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

General, administrative, and marketing expense, GAAP

$

51,253 

 

$

36,103 

 

 

$

169,774 

 

$

141,136 

Operating business development, integration, and severance expense

 

(10,012)

 

 

(4,839)

 

 

 

(16,150)

 

 

(7,371)

Adjusted G&A, non-GAAP:

$

41,241 

 

$

31,264 

 

 

$

153,624 

 

$

133,765 



Page 10 of 12

 


 

Artivion, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Operating Income and Adjusted EBITDA

(In thousands, except per share data)





 

 

 

 

 

 

 

 

 

 

 

 



(Unaudited)

 

 

(Unaudited)



Three Months Ended

 

 

Twelve Months Ended



December 31,

 

 

December 31,



2021

 

2020

 

 

2021

 

2020

Reconciliation of operating (loss) income, GAAP to

 

 

 

 

 

 

 

 

 

 

 

 

adjusted operating income, non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

$

(9,339)

 

$

1,914 

 

 

$

8,117 

 

$

2,441 

Gain from sale of non-financial assets

 

--

 

 

--

 

 

 

(15,923)

 

 

--

Amortization expense

 

4,119 

 

 

4,334 

 

 

 

16,820 

 

 

13,764 

Operating business development, integration, and severance expense

 

10,012 

 

 

4,839 

 

 

 

16,150 

 

 

7,371 

Corporate rebranding expense

 

905 

 

 

15 

 

 

 

1,428 

 

 

336 

Adjusted operating income, non-GAAP

$

5,697 

 

$

11,102 

 

 

$

26,592 

 

$

23,912 











 

 

 

 

 

 

 

 

 

 

 

 



(Unaudited)

 

 

(Unaudited)



Three Months Ended

 

 

Twelve Months Ended



December 31,

 

 

December 31,



2021

 

2020

 

 

2021

 

2020

Reconciliation of net loss, GAAP to

 

 

 

 

 

 

 

 

 

 

 

 

adjusted EBITDA, non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, GAAP

$

(20,100)

 

$

(3,458)

 

 

$

(14,834)

 

$

(16,682)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

5,969 

 

 

5,894 

 

 

 

23,977 

 

 

20,712 

Interest expense

 

3,892 

 

 

4,718 

 

 

 

16,887 

 

 

16,698 

Business development, integration, and severance expense

 

10,421 

 

 

4,839 

 

 

 

16,559 

 

 

12,320 

Stock-based compensation expense

 

3,240 

 

 

(520)

 

 

 

10,711 

 

 

6,912 

Corporate rebranding expense

 

905 

 

 

15 

 

 

 

1,428 

 

 

336 

Interest income

 

(19)

 

 

(36)

 

 

 

(79)

 

 

(217)

Income tax expense (benefit)

 

4,013 

 

 

3,366 

 

 

 

 

 

(492)

Gain from sale of non-financial assets

 

--

 

 

--

 

 

 

(15,923)

 

 

--

Loss (income) on foreign currency revaluation

 

2,447 

 

 

(2,688)

 

 

 

5,545 

 

 

(1,829)

Adjusted EBITDA, non-GAAP

$

10,768 

 

$

12,130 

 

 

$

44,278 

 

$

37,758 





Page 11 of 12

 


 













Artivion, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Net Loss and Diluted Loss Per Common Share

(In thousands, except per share data)













 

 

 

 

 

 

 

 

 

 

 



(Unaudited)

 

(Unaudited)



Three Months Ended

 

Twelve Months Ended



December 31,

 

December 31,



 

2021

 

 

2020

 

 

2021

 

 

2020

GAAP:

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

$

(16,087)

 

$

(92)

 

$

(14,827)

 

$

(17,174)

Income tax expense (benefit)

 

4,013 

 

 

3,366 

 

 

 

 

(492)

Net loss

$

(20,100)

 

$

(3,458)

 

$

(14,834)

 

$

(16,682)



 

 

 

 

 

 

 

 

 

 

 

Diluted loss per common share

$

(0.51)

 

$

(0.09)

 

$

(0.38)

 

$

(0.44)



 

 

 

 

 

 

 

 

 

 

 

Diluted weighted-average common

 

 

 

 

 

 

 

 

 

 

 

shares outstanding

 

39,161 

 

 

38,613 

 

 

38,983 

 

 

37,861 



 

 

 

 

 

 

 

 

 

 

 

Reconciliation of loss before income taxes, GAAP

 

 

 

 

 

 

 

 

 

 

 

to adjusted (loss) income before income taxes, non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes, GAAP

$

(16,087)

 

$

(92)

 

$

(14,827)

 

$

(17,174)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Business development, integration, and severance expense

 

10,421 

 

 

4,839 

 

 

16,559 

 

 

12,320 

Amortization expense

 

4,119 

 

 

4,334 

 

 

16,820 

 

 

13,764 

Gain from sale of non-financial assets

 

--

 

 

--

 

 

(15,923)

 

 

--

Non-cash interest expense

 

454 

 

 

1,395 

 

 

2,479 

 

 

3,656 

Corporate rebranding expense

 

905 

 

 

15 

 

 

1,428 

 

 

336 

Adjusted (loss) income before income taxes,

 

 

 

 

 

 

 

 

 

 

 

non-GAAP

 

(188)

 

 

10,491 

 

 

6,536 

 

 

12,902 



 

 

 

 

 

 

 

 

 

 

 

Income tax expense calculated at a pro forma tax rate of 25%

 

(47)

 

 

2,623 

 

 

1,634 

 

 

3,226 

Adjusted (loss) income, non-GAAP

$

(141)

 

$

7,868 

 

$

4,902 

 

$

9,676 



 

 

 

 

 

 

 

 

 

 

 

Reconciliation of diluted loss per common share, GAAP

 

 

 

 

 

 

 

 

 

 

 

to adjusted diluted (loss) income per common share, non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) income per common share, GAAP:

$

(0.51)

 

$

(0.09)

 

$

(0.38)

 

$

(0.44)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Business development, integration, and severance expense

 

0.26 

 

 

0.12 

 

 

0.42 

 

 

0.32 

Amortization expense

 

0.10 

 

 

0.11 

 

 

0.43 

 

 

0.36 

Gain from sale of non-financial assets

 

--

 

 

--

 

 

(0.41)

 

 

--

Non-cash interest expense

 

0.01 

 

 

0.04 

 

 

0.06 

 

 

0.09 

Corporate rebranding expense

 

0.03 

 

 

--

 

 

0.04 

 

 

0.01 

Effect of 25% pro forma tax rate

 

0.21 

 

 

0.09 

 

 

0.09 

 

 

0.10 

Tax effect of non-GAAP adjustments

 

(0.10)

 

 

(0.07)

 

 

(0.13)

 

 

(0.19)

Adjusted diluted (loss) income per common share,

 

 

 

 

 

 

 

 

 

 

 

non-GAAP:

$

(0.00)

 

$

0.20 

 

$

0.12 

 

$

0.25 



 

 

 

 

 

 

 

 

 

 

 

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:

 

39,161 

 

 

38,613 

 

 

38,983 

 

 

37,861 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Effect of dilutive stock options and awards

 

--

 

 

487 

 

 

560 

 

 

508 

Effect of convertible senior notes

 

--

 

 

--

 

 

--

 

 

--

Diluted weighted-average common shares outstanding, non-GAAP

 

39,161 

 

 

39,100 

 

 

39,543 

 

 

38,369 





Page 12 of 12