CryoLife Reports First Quarter 2020 Financial Results

ATLANTA, April 30, 2020 /PRNewswire/ --

First Quarter and Recent Business Highlights:

    --  Achieved total revenues of $66.4 million in the first quarter 2020
        versus preliminary first quarter 2020 revenues of $65.5 million
        --  Total revenues decreased 2% and decreased 1% on a constant currency
            basis versus first quarter 2019
        --  Excluding TMR, total revenues increased 1% and increased 2% on a
            constant currency basis versus first quarter of 2019
    --  Received CE Mark for our Frozen Elephant Trunk E-vita OPEN NEO
    --  Received renewed CE Mark status for our AAP Ascending Aortic Prosthesis
    --  Secured Credit Facility Covenant Modification to Enhance Liquidity

CryoLife, Inc. (NYSE: CRY), a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the first quarter ended March 31, 2020.

"During these challenging times, we are focused on protecting our employees' health and safety while continuing to supply our customers and patients who depend on our life saving and life sustaining products," commented Pat Mackin, Chairman, President, and Chief Executive Officer. "Our business is well suited to weather the impact of this global pandemic given the nature of the procedures in which our products are used. Our manufacturing facilities have been running at near capacity and our supply chain remained largely intact. We have continued to fund R&D programs related to products that could deliver revenue in 2021 and 2022, including our U.S. PerClot PMA, BioGlue China and PROACT Mitral. Further, we renegotiated our Credit Facility covenant to have greater financial flexibility, if necessary. Given our recent device approvals, and the ongoing progress made on our key growth initiatives, we expect 2021 to be a strong year for CryoLife."

First Quarter 2020 Financial Results
Total revenues for the first quarter of 2020 were $66.4 million, reflecting a decrease of (2%), and (1%) on a non-GAAP constant currency basis, both compared to the first quarter of 2019. Growth in tissue processing and On-X revenues was offset by decreases in BioGlue and JOTEC revenues.

Net loss for the first quarter of 2020 was ($6.7) million, or ($0.18) per fully diluted common share, compared to a net loss of ($297,000), or ($0.01) per fully diluted common share for the first quarter of 2019. Non-GAAP net loss for the first quarter of 2020 was ($3.0) million, or ($0.08) per fully diluted common share, compared to non-GAAP net income of $1.5 million, or $0.04 per fully diluted common share for the first quarter of 2019. Net loss on both a GAAP and non-GAAP basis reflects a $3.7 million pretax loss primarily related to non-cash unrealized foreign currency losses on intercompany payable balances.

2020 Financial Outlook
As previously reported on April 1, 2020, the Company has withdrawn its 2020 financial guidance due to uncertainties resulting from the COVID-19 pandemic.

All numbers are presented on a GAAP basis except where expressly referenced as non-GAAP. The Company does not provide GAAP income per common share on a forward-looking basis because the Company is unable to predict with reasonable certainty business development and acquisition-related expenses, purchase accounting fair value adjustments, and any unusual gains and losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP.

The Company's financial performance for 2020 is subject to the risks identified below.

Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. Investors should consider this non-GAAP information in addition to, and not as a substitute for, financial measures prepared in accordance with U.S. 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 net income and non-GAAP EBITDA results exclude (as applicable) business development and integration expenses, amortization expense, inventory basis step-up expense, loss on foreign currency revaluation, stock-based compensation expense, and corporate rebranding expenses. The Company 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. The Company has excluded the impact of changes in currency exchange from certain revenues to evaluate 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.

Webcast and Conference Call Information
The Company will hold a teleconference call and live webcast later today, April 30, 2020 at 4:30 p.m. ET to discuss the results followed by a question and answer session. To listen to the live teleconference, please dial 201-689-8261. A replay of the teleconference will be available through May 7, 2020 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13702193.

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

About CryoLife, Inc.
Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable tissues used in cardiac and vascular surgical procedures focused on aortic repair. CryoLife markets and sells products in more than 100 countries worldwide. For additional information about CryoLife, visit our website, www.cryolife.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 our business is well suited to weather the impact of the COVID-19 pandemic given the nature of the procedures in which our products are used; that we are funding R&D programs for products that could deliver revenue in 2021 and 2022, including our U.S. PerClot PMA, BioGlue China, and PROACT Mitral; that the renegotiation of our Credit Facility covenant will give us greater financial flexibility, if necessary; and that we expect 2021 to be a strong year for CryoLife. 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. 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, 2019. CryoLife does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.


                                                             
        
             CryoLife, Inc. and Subsidiaries
                                                                   
             Financial Highlights
                                                               
         (In thousands, except per share data)




                                                                                                                       Three Months Ended


                                                                                                            
          
            March 31,



                                                                                                                                  2020                   2019




     
              Revenues:



     Products                                                                                                          $
            46,420          $
         48,401



     Preservation services                                                                                                     20,009                 19,104




     
              Total revenues                                                                                                 66,429                 67,505






     
              Cost of products and preservation services:



     Products                                                                                                                  13,040                 13,826



     Preservation services                                                                                                      9,218                  9,406




     
              Total cost of products and preservation services                                                               22,258                 23,232






     
              Gross margin                                                                                                   44,171                 44,273






     
              Operating expenses:



     General, administrative, and marketing                                                                                    39,002                 36,520



     Research and development                                                                                                   6,356                  5,548




     
              Total operating expenses                                                                                       45,358                 42,068






     
              Operating (loss) income                                                                                       (1,187)                 2,205






     Interest expense                                                                                                           3,388                  3,894



     Interest income                                                                                                            (102)                 (116)



     Other expense, net                                                                                                         3,662                     77






     
              Loss before income taxes                                                                                      (8,135)               (1,650)



     Income tax benefit                                                                                                       (1,470)               (1,353)






     
              Net loss                                                                                      $
         
              (6,665)    $
       
           (297)

                                                                                                                                                           ===




     
              Loss per common share:



     
              Basic                                                                                          $
         
              (0.18)   $
       
           (0.01)

                                                                                                                                                           ===


     
              Diluted                                                                                        $
         
              (0.18)   $
       
           (0.01)

                                                                                                                                                           ===




     
              Weighted-average common shares outstanding:



     Basic                                                                                                                     37,390                 36,778



     Diluted                                                                                                                   37,390                 36,778





     
              Net loss                                                                                      $
         
              (6,665)    $
       
           (297)



     
              Other comprehensive loss:



     Foreign currency translation adjustments                                                                                 (4,463)               (3,781)




     
              Comprehensive loss                                                                           $
         
              (11,128)  $
       
           (4,078)

                                                                                                                                                           ===


                     
              
                CryoLife, Inc. and Subsidiaries
                                
                Financial Highlights
                                   
                (In thousands)




                                                            
              (Unaudited)


                                                                         Three Months Ended


                                                                              March 31,



                                                   2020                                     2019

                                                                                            ---


     
                Products:



     BioGlue                                                          $
              16,737            $
        17,222



     JOTEC                                                                      15,268                  15,954



     On-X                                                                       12,202                  11,731



     PhotoFix                                                                    1,042                     730



     PerClot                                                                       860                   1,050



     NEXUS                                                                         200


      CardioGenesis cardiac laser therapy                                           111                   1,714



                             Total products                                      46,420                  48,401




                   Preservation services:



     Cardiac tissue                                                   $
              10,033             $
        8,930



     Vascular tissue                                                             9,976                  10,174



                   Total preservation services                                   20,009                  19,104




                   Total revenues                         $
              
                66,429        $
     
          67,505

                                                                                                             ===




     
                Revenues:



     U.S.                                                             $
              36,447            $
        37,325



     International                                                              29,982                  30,180



                   Total revenues                         $
              
                66,429        $
     
          67,505

                                                                                                             ===




                       (Unaudited)


                                   March 31,            December 31,


                                        2020                     2019



     Cash, cash
      equivalents, and
      restricted
      securities                             $
      63,877               $
      34,294


     Total current
      assets                                    214,082                  187,390


     Total assets                               621,033                  605,654


     Total current
      liabilities                                43,685                   45,195


     Total liabilities                          344,424                  319,958


     Shareholders'
      equity                                    276,609                  285,696


                                                                                    
              
                CryoLife, Inc. and Subsidiaries
                                                                                        
                Reconciliation of GAAP to Non-GAAP
                                                                                
                Net Loss and Diluted (Loss) Income Per Common Share
                                                                                       
                (In thousands, except per share data)




                                                                                                                                                   
      (Unaudited)


                                                                                                                                                         Three Months Ended


                                                                                                                                                             March 31,



                                                                                                                                                                   2020                    2019




              
                
                  GAAP:



              
                Loss before income taxes                                                                                             $
      
                (8,135)   $
        
          (1,650)



              Income tax benefit                                                                                                                               (1,470)                (1,353)




              
                Net loss                                                                                                             $
      
                (6,665)     $
        
          (297)

                                                                                                                                                                                             ===




              
                Diluted loss per common share:                                                                                        $
      
                (0.18)    $
        
          (0.01)

                                                                                                                                                                                             ---




              
                
                  Reconciliation of loss before income taxes,



              
                
                  GAAP to adjusted net (loss) income, non-GAAP



              
                Loss before income taxes, GAAP                                                                                       $
      
                (8,135)   $
        
          (1,650)



              Adjustments:



              Amortization expense                                                                                                                               3,033                   2,579



              Business development and integration expenses                                                                                                        823                   1,109



              Corporate rebranding                                                                                                                                 321




              
                Adjusted (loss) income before income taxes,



              
                non-GAAP                                                                                                                            (3,958)                  2,038



              Income tax expense calculated at a


    pro forma tax rate of 25%                                                                                                                                   (989)                    510




              
                Adjusted net (loss) income, non-GAAP                                                                                 $
      
                (2,969)     $
        
          1,528

                                                                                                                                                                                             ===




              
                
                  Reconciliation of diluted loss per common share, GAAP



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



              
                Diluted loss per common share, GAAP:                                                                                  $
      
                (0.18)    $
        
          (0.01)



              Adjustments:



              Amortization expense                                                                                                                                0.08                    0.07



              Business development and integration expenses                                                                                                       0.02                    0.03



              Corporate rebranding                                                                                                                                0.01



              Tax effect of non-GAAP adjustments                                                                                                                (0.03)                 (0.03)



              Effect of 25% pro forma tax rate                                                                                                                    0.02                  (0.02)




              
                Adjusted diluted (loss) income per common share,



              
                 non-GAAP:                                                                                                            $
      
                (0.08)      $
        
          0.04

                                                                                                                                                                                             ===




              
                Diluted weighted-average common



              
                shares outstanding                                                                                                                   37,390                  37,711


                                                                                             
        
             CryoLife, Inc. and Subsidiaries
                                                                                                
        Reconciliation of GAAP to Non-GAAP
                                                                                                     
                Revenues
                                                                                               
        (In thousands, except per share data)




                                                                                                                                                 
         (Unaudited)


                                                                                                                                         
            
           Three Months Ended


                                                                                                                                             
          
             March 31,



                                                                                                                                          2020                               2019                   Growth
                                                                                                                                                                                           Rate

                                                                                                                                                                                                            ---


              
                
                  Reconciliation of total revenues, GAAP to



              
                
                  total revenues, non-GAAP:



              Total revenues, GAAP                                                                                                                    $
              66,429                        $
             67,505  -2%



              Impact of changes in currency exchange                                                                                                                             (629)




              
                Total constant currency revenues, non-GAAP                                                                         $
         
                66,429               $
          
               66,876  -1%






              
                
                  Reconciliation of total revenues, GAAP to



              
                
                  total revenues, non-GAAP:



              Total revenues, GAAP                                                                                                                    $
              66,429                        $
             67,505  -2%



              Less CardioGenesis cardiac laser therapy                                                                                                           (111)                                 (1,714)




              
                Total GAAP revenues excluding                                                                                                        66,318                                   65,791   1%
    CardioGenesis



              Impact of changes in currency exchange                                                                                                                             (629)




              
                Total constant currency revenues excluding                                                                         $
         
                66,318               $
          
               65,162   2%
    CardioGenesis, non-GAAP






              
                
                  Reconciliation of total BioGlue revenues, GAAP to



              
                
                  total BioGlue revenues, non-GAAP:



              Total BioGlue revenues, GAAP                                                                                                            $
              16,737                        $
             17,222  -3%



              Impact of changes in currency exchange                                                                                                                              (76)




              
                Total constant currency BioGlue revenues, non-GAAP                                                                 $
         
                16,737               $
          
               17,146  -2%






              
                
                  Reconciliation of total On-X revenues, GAAP to



              
                
                  total On-X revenues, non-GAAP:



              Total On-X revenues, GAAP                                                                                                               $
              12,202                        $
             11,731   4%



              Impact of changes in currency exchange                                                                                                                              (17)




              
                Total constant currency On-X revenues, non-GAAP                                                                    $
         
                12,202               $
          
               11,714   4%






              
                
                  Reconciliation of total JOTEC revenues, GAAP, to



              
                
                  total JOTEC revenues, non-GAAP:



              Total JOTEC revenues, GAAP                                                                                                              $
              15,268                        $
             15,954  -4%



              Impact of changes in currency exchange                                                                                                                             (534)




              
                Total constant currency JOTEC revenues, non-GAAP                                                                   $
         
                15,268               $
          
               15,420  -1%


                                                    
              
                CryoLife, Inc. and Subsidiaries
                                                        
                Reconciliation of GAAP to Non-GAAP
                                                                  
                Adjusted EBITDA
                                                       
                (In thousands, except per share data)




                                                                                                                  
      (Unaudited)


                                                                                                                        Three Months Ended


                                                                                                                            March 31,



                                                                                                            2020                           2019

                                                                                                                                           ---


     
                
                  Reconciliation of net loss, GAAP to



     
                
                  adjusted EBITDA, non-GAAP:



     Net loss, GAAP                                                                                                $
              (6,665)            $
         (297)



     Adjustments:



     Depreciation and amortization expense                                                                                     4,898                    4,350



     Loss on foreign currency revaluation                                                                                      3,663                       74



     Interest expense                                                                                                          3,388                    3,894



     Stock-based compensation expense                                                                                          2,564                    1,853



     Business development and integration expenses                                                                               823                    1,109



     Corporate rebranding                                                                                                        321



     Interest income                                                                                                           (102)                   (116)



     Income tax benefit                                                                                                      (1,470)                 (1,353)



     
                Adjusted EBITDA, non-GAAP                                                                     $
      
                7,420         $
     
           9,514

                                                                                                                                                            ===


                   Contacts:




                   CryoLife     
     
                Gilmartin Group LLC


     D. Ashley Lee             
     Greg Chodaczek / Lynn Lewis

      Executive Vice President,
       Chief Financial Officer
       and Chief                
     Phone:  347-620-7010

      Operating Officer         
     
                investors@cryolife.com

      Phone: 770-419-3355

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SOURCE CryoLife, Inc.