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): August 8, 2024
___________________________________________
(Exact name of registrant as specified in its charter)
___________________________________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive office) | (Zip Code) | |||||||
Registrant's telephone number, including area code: (770 ) 419-3355
___________________________________________________________________________________
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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 2.02 Results of Operations and Financial Condition
On August 8, 2024, Artivion, Inc. (“Artivion”) issued a press release announcing its financial results for the second quarter ended June 30, 2024. Artivion hereby incorporates by reference herein the information set forth in its press release dated August 8, 2024, 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 August 8, 2024. | ||||
| 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: August 8, 2024
| ARTIVION, INC. | ||||||||
| By: | /s/ Lance A. Berry | |||||||
| Name: | Lance A. Berry | |||||||
| Title: | Chief Financial Officer and Executive Vice President, Finance | |||||||
-3-
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
| Artivion | Gilmartin Group LLC | ||||
| Lance A. Berry | Brian Johnston / Laine Morgan | ||||
| Executive Vice President & | Phone: 332-895-3222 | ||||
| Chief Financial Officer | investors@artivion.com | ||||
| Phone: 770-419-3355 | |||||
Artivion Reports Second Quarter 2024 Financial Results
Second Quarter Highlights:
•Achieved revenue of $98.0 million in the second quarter of 2024 versus $89.3 million in the second quarter of 2023, an increase of 10% on both a GAAP and constant currency basis
•Net loss was ($2.1) million or ($0.05) per fully diluted share and non-GAAP net income was $2.9 million or $0.07 per fully diluted share in the second quarter of 2024
•Adjusted EBITDA increased 35% to $18.6 million in the second quarter of 2024 compared to $13.8 million in the second quarter of 2023
•Raised FY24 revenue guidance to 10% to 12% year-over-year growth on a constant currency basis, an increase of 0.5% at the midpoint
•Raised FY24 adjusted EBITDA guidance to 28% to 34% year-over-year growth, an increase of 1% at the midpoint
ATLANTA, GA – (August 8, 2024) – Artivion, Inc. (NYSE: AORT), a leading cardiac and vascular surgery company focused on aortic disease, today announced financial results for the second quarter ended June 30, 2024.
“In the second quarter, we continued to make substantial progress on our strategic growth initiatives to drive sustained and profitable growth, and we further solidified our position as the leader in the aortic disease space. Revenue growth in the second quarter was driven by year-over-year constant currency growth in On-X of 15% and stent grafts of 13%, both compared to the second quarter of 2023. We also saw continued revenue strength across Latin America and Asia Pacific, which grew 25% and 15%, respectively, in the second quarter on a constant currency basis compared to the same period last year. In addition to our strong revenue performance, adjusted EBITDA grew 35% this quarter, demonstrating our ability to scale the business and continue to expand adjusted EBITDA margins,” said Pat Mackin, Chairman, President, and Chief Executive Officer.
Mr. Mackin concluded, “Given our second quarter performance, we are raising our full year revenue and adjusted EBITDA expectations for 2024.”
Second Quarter 2024 Financial Results
Total revenues for the second quarter of 2024 were $98.0 million, an increase of 10% on both a GAAP basis and constant currency basis, both compared to the second quarter of 2023.
Page 1 of 10
Net loss for the second quarter of 2024 was ($2.1) million, or ($0.05) per fully diluted common share, compared to net loss of ($3.4) million, or ($0.08) per fully diluted common share for the second quarter of 2023. Non-GAAP net income for the second quarter of 2024 was $2.9 million, or $0.07 per fully diluted common share, compared to non-GAAP net income of $2.3 million, or $0.06 per fully diluted common share for the second quarter of 2023. Non-GAAP net income for the second quarter of 2024 includes pretax losses related to foreign currency revaluation of $0.9 million.
2024 Financial Outlook
Artivion is raising its revenue guidance range and now expects constant currency revenue growth of between 10% to 12% for the full year 2024, compared to the 9% to 12% previously provided. Growth rates are compared to 2023. The Company expects revenues to be in the range of $388 to $396 million compared to the previously articulated range of $386 to $396 million. At current rates, the Company expects negligible year-over-year currency impact on the full year 2024 revenues.
Additionally, Artivion is raising its adjusted EBITDA guidance range and now expects growth of between 28% and 34% for the full year 2024, compared to the 26% to 34% previously provided. Growth rates are compared to 2023. The Company expects adjusted EBITDA to be in the range of $69 to $72 million compared to the previously articulated range of $68 to $72 million.
The Company's financial performance for 2024 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 adjusted EBITDA, non-GAAP general, administrative, and marketing expenses, and free cash flows. 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 adjusted EBITDA, non-GAAP general, administrative, and marketing, and free cash flows 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, loss on extinguishment of debt, 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
Page 2 of 10
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 on August 8, 2024, 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 13746922.
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 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, but are not limited to, those regarding our full year revenue expectations and our confidence in our ability to meet or exceed our adjusted EBITDA target for 2024; the timeline for regulatory approval for AMDS and other products; that our revenues for the full year 2024 will be in the range of $388 and $396 million, representing revenue growth of between 10% to 12% compared to 2023 on a constant currency basis; expect, at current exchange rates, negligible currency impact on the 2024 full year revenues; and expect non-GAAP adjusted EBITDA to increase between 28% and 34% for the full year 2024 compared to 2023, resulting in non-GAAP adjusted EBITDA in the range of $69 to $72 million in 2024. These forward-looking statements are subject to a number of risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from current expectations, including, but not limited to, the unpredictability of the timing and outcome of regulatory decisions, the benefits anticipated from the Ascyrus Medical LLC transaction and Endospan agreements and our operational improvements in our tissue and stent graft business may not be achieved at all or at the levels we anticipate or had originally anticipated; the benefits anticipated from our clinical trials and regulatory approvals may not be achieved or achieved on our anticipated timelines; and the benefits anticipated from our expansion into APAC and LATAM may not be achieved or achieved on our anticipated timelines. These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for the year ended December 31, 2023, and our Form 10-Q for the quarter ended June 30, 2024. Artivion does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.
Page 3 of 10
Artivion, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
In Thousands, Except Per Share Data
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Products | $ | 73,210 | $ | 66,003 | $ | 144,324 | $ | 128,294 | |||||||||||||||
| Preservation services | 24,809 | 23,248 | 51,126 | 44,186 | |||||||||||||||||||
| Total revenues | 98,019 | 89,251 | 195,450 | 172,480 | |||||||||||||||||||
| Cost of products and preservation services: | |||||||||||||||||||||||
| Products | 24,545 | 20,977 | 48,295 | 40,510 | |||||||||||||||||||
| Preservation services | 10,150 | 10,190 | 20,885 | 20,159 | |||||||||||||||||||
| Total cost of products and preservation services | 34,695 | 31,167 | 69,180 | 60,669 | |||||||||||||||||||
| Gross margin | 63,324 | 58,084 | 126,270 | 111,811 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| General, administrative, and marketing | 49,320 | 57,241 | 80,009 | 107,606 | |||||||||||||||||||
| Research and development | 7,497 | 7,418 | 14,443 | 14,641 | |||||||||||||||||||
| Total operating expenses | 56,817 | 64,659 | 94,452 | 122,247 | |||||||||||||||||||
| Gain from sale of non-financial assets | — | (14,250) | — | (14,250) | |||||||||||||||||||
| Operating income | 6,507 | 7,675 | 31,818 | 3,814 | |||||||||||||||||||
| Interest expense | 8,304 | 6,356 | 16,130 | 12,452 | |||||||||||||||||||
| Interest income | (353) | (265) | (727) | (340) | |||||||||||||||||||
| Loss on extinguishment of debt | — | — | 3,669 | — | |||||||||||||||||||
| Other expense, net | 983 | 4,241 | 2,392 | 3,278 | |||||||||||||||||||
| (Loss) income before income taxes | (2,427) | (2,657) | 10,354 | (11,576) | |||||||||||||||||||
| Income tax (benefit) expense | (306) | 725 | 4,942 | 5,338 | |||||||||||||||||||
| Net (loss) income | $ | (2,121) | $ | (3,382) | $ | 5,412 | $ | (16,914) | |||||||||||||||
| (Loss) income per share: | |||||||||||||||||||||||
| Basic | $ | (0.05) | $ | (0.08) | $ | 0.13 | $ | (0.41) | |||||||||||||||
| Diluted | $ | (0.05) | $ | (0.08) | $ | 0.13 | $ | (0.41) | |||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic | 41,683 | 40,755 | 41,487 | 40,595 | |||||||||||||||||||
| Diluted | 41,683 | 40,755 | 42,405 | 40,595 | |||||||||||||||||||
| Net (loss) income | $ | (2,121) | $ | (3,382) | $ | 5,412 | $ | (16,914) | |||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||
| Foreign currency translation adjustments | (2,727) | 1,026 | (5,864) | $ | 5,647 | ||||||||||||||||||
| Unrealized gain (loss) from foreign currency intra-entity loans, net of tax | 404 | 800 | 2,013 | (205) | |||||||||||||||||||
| Comprehensive (loss) income | $ | (4,444) | $ | (1,556) | $ | 1,561 | $ | (11,472) | |||||||||||||||
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Artivion, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
In Thousands
| June 30, 2024 | December 31, 2023 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 55,019 | $ | 58,940 | |||||||
| Trade receivables, net | 73,890 | 71,796 | |||||||||
| Other receivables | 5,063 | 2,342 | |||||||||
| Inventories, net | 80,802 | 81,976 | |||||||||
| Deferred preservation costs, net | 50,674 | 49,804 | |||||||||
| Prepaid expenses and other | 19,514 | 15,810 | |||||||||
| Total current assets | 284,962 | 280,668 | |||||||||
| Goodwill | 244,008 | 247,337 | |||||||||
| Acquired technology, net | 135,151 | 142,593 | |||||||||
| Operating lease right-of-use assets, net | 41,655 | 43,822 | |||||||||
| Property and equipment, net | 37,440 | 38,358 | |||||||||
| Other intangibles, net | 29,261 | 29,638 | |||||||||
| Deferred income taxes | 3,309 | 1,087 | |||||||||
| Other long-term assets | 13,753 | 8,894 | |||||||||
| Total assets | $ | 789,539 | $ | 792,397 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 11,728 | $ | 13,318 | |||||||
| Accrued expenses | 16,490 | 12,732 | |||||||||
| Accrued compensation | 13,995 | 18,715 | |||||||||
| Current maturities of operating leases | 3,283 | 3,395 | |||||||||
| Taxes payable | 1,734 | 3,840 | |||||||||
| Accrued procurement fees | 1,472 | 1,439 | |||||||||
| Current portion of long-term debt | 268 | 1,451 | |||||||||
| Other current liabilities | 1,612 | 2,972 | |||||||||
| Total current liabilities | 50,582 | 57,862 | |||||||||
| Long-term debt | 313,295 | 305,531 | |||||||||
| Contingent consideration | 48,210 | 63,890 | |||||||||
| Non-current maturities of operating leases | 41,967 | 43,977 | |||||||||
| Deferred income taxes | 21,719 | 21,851 | |||||||||
| Deferred compensation liability | 7,455 | 6,760 | |||||||||
| Non-current finance lease obligation | 3,202 | 3,405 | |||||||||
| Other long-term liabilities | 8,053 | 7,341 | |||||||||
| Total liabilities | $ | 494,483 | $ | 510,617 | |||||||
| Commitments and contingencies | |||||||||||
| Shareholders’ equity: | |||||||||||
| Preferred stock | — | — | |||||||||
| Common stock (75,000 shares authorized, 43,279 and 42,569 shares issued in 2024 and 2023, respectively) | 433 | 426 | |||||||||
| Additional paid-in capital | 367,627 | 355,919 | |||||||||
| Retained deficit | (42,495) | (47,907) | |||||||||
| Accumulated other comprehensive loss | (15,861) | (12,010) | |||||||||
| Treasury stock, at cost, 1,487 shares as of June 30, 2024 and December 31, 2023 | (14,648) | (14,648) | |||||||||
| Total shareholders’ equity | 295,056 | 281,780 | |||||||||
| Total liabilities and shareholders’ equity | $ | 789,539 | $ | 792,397 | |||||||
Page 5 of 10
Artivion, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
In Thousands
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Net cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 5,412 | $ | (16,914) | |||||||
| Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||||||
| Depreciation and amortization | 11,800 | 11,501 | |||||||||
| Non-cash compensation | 7,730 | 7,279 | |||||||||
| Non-cash lease expense | 3,897 | 3,631 | |||||||||
| Loss on extinguishment of debt | 3,669 | — | |||||||||
| Write-down of inventories and deferred preservation costs | 1,508 | 2,021 | |||||||||
| Deferred income taxes | 994 | (8,073) | |||||||||
| Fair value adjustment of long-term loan | — | 5,000 | |||||||||
| Gain from sale of non-financial assets | — | (14,250) | |||||||||
| Change in fair value of contingent consideration | (15,680) | 15,700 | |||||||||
| Other | 1,178 | 1,836 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Inventories and deferred preservation costs | (2,165) | (6,921) | |||||||||
| Prepaid expenses and other assets | (5,224) | (2,317) | |||||||||
| Accounts payable, accrued expenses, and other liabilities | (6,031) | 1,607 | |||||||||
| Receivables | (6,446) | 655 | |||||||||
| Net cash flows provided by operating activities | 642 | 755 | |||||||||
| Net cash flows from investing activities: | |||||||||||
| Proceeds from sale of non-financial assets, net | — | 14,250 | |||||||||
| Payments for Endospan Agreement | — | (5,000) | |||||||||
| Capital expenditures | (6,124) | (5,015) | |||||||||
| Net cash flows (used in) provided by investing activities | (6,124) | 4,235 | |||||||||
| Net cash flows from financing activities: | |||||||||||
| Proceeds from issuance of debt | 190,000 | — | |||||||||
| Proceeds from revolving credit facility | 30,000 | — | |||||||||
| Proceeds from exercise of stock options and issuance of common stock | 3,587 | 2,581 | |||||||||
| Proceeds from financing insurance premiums | — | 3,558 | |||||||||
| Principal payments on short-term notes payable | (1,027) | (529) | |||||||||
| Payment of debt issuance costs | (10,044) | — | |||||||||
| Repayment of debt | (211,688) | (1,381) | |||||||||
| Other | (272) | (825) | |||||||||
| Net cash flows provided by financing activities | 556 | 3,404 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,005 | 1,030 | |||||||||
| (Decrease) increase in cash and cash equivalents | (3,921) | 9,424 | |||||||||
| Cash and cash equivalents beginning of period | 58,940 | 39,351 | |||||||||
| Cash and cash equivalents end of period | $ | 55,019 | $ | 48,775 | |||||||
Page 6 of 10
Artivion, Inc. and Subsidiaries
Financial Highlights
In Thousands
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Products: | |||||||||||||||||||||||
| Aortic stent grafts | $ | 32,190 | $ | 28,359 | $ | 64,293 | $ | 54,509 | |||||||||||||||
| On-X | 20,645 | 17,946 | 40,326 | 35,602 | |||||||||||||||||||
| Surgical sealants | 18,545 | 16,566 | 35,526 | 33,269 | |||||||||||||||||||
| Other | 1,830 | 3,132 | 4,179 | 4,914 | |||||||||||||||||||
| Total products | 73,210 | 66,003 | 144,324 | 128,294 | |||||||||||||||||||
| Preservation services | 24,809 | 23,248 | 51,126 | 44,186 | |||||||||||||||||||
| Total revenues | $ | 98,019 | $ | 89,251 | $ | 195,450 | $ | 172,480 | |||||||||||||||
| North America | 48,662 | 46,268 | 99,590 | 89,513 | |||||||||||||||||||
| Europe, the Middle East, and Africa | 34,145 | 30,143 | 67,733 | 58,072 | |||||||||||||||||||
| Asia Pacific | 9,653 | 8,375 | 17,262 | 16,253 | |||||||||||||||||||
| Latin America | 5,559 | 4,465 | 10,865 | 8,642 | |||||||||||||||||||
| Total revenues | $ | 98,019 | $ | 89,251 | $ | 195,450 | $ | 172,480 | |||||||||||||||
Page 7 of 10
Artivion, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Revenues
In Thousands
(Unaudited)
| Revenues for the Three Months Ended June 30, | Percent Change From Prior Year | ||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||
| US GAAP | US GAAP | Exchange Rate Effect | Constant Currency | Constant Currency | |||||||||||||||||||||||||
| Products: | |||||||||||||||||||||||||||||
| Aortic stent grafts | $ | 32,190 | $ | 28,359 | $ | 148 | $ | 28,507 | 13% | ||||||||||||||||||||
| On-X | 20,645 | 17,946 | (3) | 17,943 | 15% | ||||||||||||||||||||||||
| Surgical sealants | 18,545 | 16,566 | — | 16,566 | 12% | ||||||||||||||||||||||||
| Other | 1,830 | 3,132 | (2) | 3,130 | -42% | ||||||||||||||||||||||||
| Total products | 73,210 | 66,003 | 143 | 66,146 | 11% | ||||||||||||||||||||||||
| Preservation services | 24,809 | 23,248 | (6) | 23,242 | 7% | ||||||||||||||||||||||||
| Total | $ | 98,019 | $ | 89,251 | $ | 137 | $ | 89,388 | 10% | ||||||||||||||||||||
| North America | 48,662 | 46,268 | (11) | 46,257 | 5% | ||||||||||||||||||||||||
| Europe, the Middle East, and Africa | 34,145 | 30,143 | 177 | 30,320 | 13% | ||||||||||||||||||||||||
| Asia Pacific | 9,653 | 8,375 | (1) | 8,374 | 15% | ||||||||||||||||||||||||
| Latin America | 5,559 | 4,465 | (28) | 4,437 | 25% | ||||||||||||||||||||||||
| Total | $ | 98,019 | $ | 89,251 | $ | 137 | $ | 89,388 | 10% | ||||||||||||||||||||
| Revenues for the Six Months Ended June 30, | Percent Change From Prior Year | ||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||
| US GAAP | US GAAP | Exchange Rate Effect | Constant Currency | Constant Currency | |||||||||||||||||||||||||
| Products: | |||||||||||||||||||||||||||||
| Aortic stent grafts | $ | 64,293 | $ | 54,509 | 896 | $ | 55,405 | 16% | |||||||||||||||||||||
| On-X | 40,326 | 35,602 | 101 | 35,703 | 13% | ||||||||||||||||||||||||
| Surgical sealants | 35,526 | 33,269 | 118 | 33,387 | 6% | ||||||||||||||||||||||||
| Other | 4,179 | 4,914 | 3 | 4,917 | -15% | ||||||||||||||||||||||||
| Total products | 144,324 | 128,294 | 1,118 | 129,412 | 12% | ||||||||||||||||||||||||
| Preservation services | 51,126 | 44,186 | (4) | 44,182 | 16% | ||||||||||||||||||||||||
| Total | $ | 195,450 | $ | 172,480 | $ | 1,114 | $ | 173,594 | 13% | ||||||||||||||||||||
| North America | 99,590 | 89,513 | (7) | 89,506 | 11% | ||||||||||||||||||||||||
| Europe, the Middle East, and Africa | 67,733 | 58,072 | 982 | 59,054 | 15% | ||||||||||||||||||||||||
| Asia Pacific | 17,262 | 16,253 | (1) | 16,252 | 6% | ||||||||||||||||||||||||
| Latin America | 10,865 | 8,642 | 140 | 8,782 | 24% | ||||||||||||||||||||||||
| Total | $ | 195,450 | $ | 172,480 | $ | 1,114 | $ | 173,594 | 13% | ||||||||||||||||||||
Page 8 of 10
Artivion, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
General, Administrative, and Marketing Expense, Adjusted EBITDA, and Free Cash Flows
In Thousands
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Reconciliation of G&A expense, GAAP to adjusted G&A, non-GAAP: | |||||||||||||||||||||||
| General, administrative, and marketing expense, GAAP | $ | 49,320 | $ | 57,241 | $ | 80,009 | $ | 107,606 | |||||||||||||||
| Business development, integration, and severance expense (income) | 2,033 | 11,101 | (15,354) | 16,098 | |||||||||||||||||||
| Corporate rebranding expense | — | 69 | — | 218 | |||||||||||||||||||
| Abandonment of CardioGenesis Cardiac laser therapy business | — | 160 | — | 160 | |||||||||||||||||||
| Adjusted G&A, non-GAAP | $ | 47,287 | $ | 45,911 | $ | 95,363 | $ | 91,130 | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Reconciliation of net (loss) income, GAAP to adjusted EBITDA, non-GAAP: | |||||||||||||||||||||||
| Net (loss) income, GAAP | $ | (2,121) | $ | (3,382) | $ | 5,412 | $ | (16,914) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Interest expense | 8,304 | 6,356 | 16,130 | 12,452 | |||||||||||||||||||
| Depreciation and amortization expense | 5,891 | 5,767 | 11,800 | 11,501 | |||||||||||||||||||
| Stock-based compensation expense | 4,252 | 3,938 | 7,730 | 7,279 | |||||||||||||||||||
| Income tax (benefit) expense | (306) | 725 | 4,942 | 5,338 | |||||||||||||||||||
| Loss on extinguishment of debt | — | — | 3,669 | — | |||||||||||||||||||
| Loss (gain) on foreign currency revaluation | 943 | (797) | 2,353 | (1,770) | |||||||||||||||||||
| Abandonment of CardioGenesis Cardiac laser therapy business | — | 390 | — | 390 | |||||||||||||||||||
| Corporate rebranding expense | — | 69 | — | 218 | |||||||||||||||||||
| Gain from sale of non-financial assets | — | (14,250) | — | (14,250) | |||||||||||||||||||
| Interest income | (353) | (265) | (727) | (340) | |||||||||||||||||||
| Business development, integration, and severance expense (income) | 2,033 | 15,270 | (15,354) | 20,722 | |||||||||||||||||||
| Adjusted EBITDA, non-GAAP | $ | 18,643 | $ | 13,821 | $ | 35,955 | $ | 24,626 | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Reconciliation of cash flows from operating activities, GAAP to free cash flows, non-GAAP: | |||||||||||||||||||||||
| Net cash flows provided by operating activities | $ | 6,135 | $ | 6,909 | $ | 642 | $ | 755 | |||||||||||||||
| Capital expenditures | (2,513) | (2,172) | (6,124) | (5,015) | |||||||||||||||||||
| Free cash flows, non-GAAP | $ | 3,622 | $ | 4,737 | $ | (5,482) | $ | (4,260) | |||||||||||||||
Page 9 of 10
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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP: | |||||||||||||||||||||||
| (Loss) income before income taxes | $ | (2,427) | $ | (2,657) | $ | 10,354 | $ | (11,576) | |||||||||||||||
| Income tax (benefit) expense | (306) | 725 | 4,942 | 5,338 | |||||||||||||||||||
| Net (loss) income | $ | (2,121) | $ | (3,382) | $ | 5,412 | $ | (16,914) | |||||||||||||||
| Diluted (loss) income per common share | $ | (0.05) | $ | (0.08) | $ | 0.13 | $ | (0.41) | |||||||||||||||
| Diluted weighted-average common shares outstanding | 41,683 | 40,755 | 42,405 | 40,595 | |||||||||||||||||||
| Reconciliation of (loss) income before income taxes, GAAP to adjusted income, non-GAAP: | |||||||||||||||||||||||
| (Loss) income before income taxes, GAAP: | $ | (2,427) | $ | (2,657) | $ | 10,354 | $ | (11,576) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Amortization expense | 3,793 | 3,806 | 7,660 | 7,687 | |||||||||||||||||||
| Loss on extinguishment of debt | — | — | 3,669 | — | |||||||||||||||||||
| Non-cash interest expense | 484 | 464 | 1,064 | 926 | |||||||||||||||||||
| Abandonment of CardioGenesis Cardiac laser therapy business | — | 390 | — | 390 | |||||||||||||||||||
| Corporate rebranding expense | — | 69 | — | 218 | |||||||||||||||||||
| Gain from sale of non-financial assets | — | (14,250) | — | (14,250) | |||||||||||||||||||
| Business development, integration, and severance expense (income) | 2,033 | 15,270 | (15,354) | 20,722 | |||||||||||||||||||
| Adjusted income before income taxes, non-GAAP | 3,883 | 3,092 | 7,393 | 4,117 | |||||||||||||||||||
| Income tax expense calculated at a tax rate of 25% | 970 | 773 | 1,848 | 1,029 | |||||||||||||||||||
| Adjusted net income, non-GAAP | $ | 2,913 | $ | 2,319 | $ | 5,545 | $ | 3,088 | |||||||||||||||
| Reconciliation of diluted income (loss) per common share, GAAP to adjusted diluted income per common share, non-GAAP: | |||||||||||||||||||||||
| Diluted income (loss) per common share, GAAP: | $ | (0.05) | $ | (0.08) | $ | 0.13 | $ | (0.41) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Amortization expense | 0.09 | 0.09 | 0.18 | 0.19 | |||||||||||||||||||
| Loss on extinguishment of debt | — | — | 0.09 | — | |||||||||||||||||||
| 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 | |||||||||||||||||||
| Gain from sale of non-financial assets | — | (0.34) | — | (0.34) | |||||||||||||||||||
| Business development, integration, and severance expense (income) | 0.05 | 0.37 | (0.36) | 0.50 | |||||||||||||||||||
| Tax effect of non-GAAP adjustments | (0.04) | (0.03) | 0.01 | (0.10) | |||||||||||||||||||
| Effect of 25% tax rate | 0.01 | 0.03 | 0.06 | 0.20 | |||||||||||||||||||
| Adjusted diluted income per common share, non-GAAP | $ | 0.07 | $ | 0.06 | $ | 0.13 | $ | 0.08 | |||||||||||||||
| 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: | 41,683 | 40,755 | 42,405 | 40,595 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Effect of dilutive stock options and awards | 941 | 419 | — | 444 | |||||||||||||||||||
| Diluted weighted-average common shares outstanding, non-GAAP | 42,624 | 41,174 | 42,405 | 41,039 | |||||||||||||||||||
Page 10 of 10