CryoLife Reports Third Quarter 2020 Financial Results
ATLANTA, Nov. 4, 2020 /PRNewswire/ --
Third Quarter and Recent Business Highlights:
-- Achieved total revenues of $65.1 million in the third quarter 2020
versus $67.9 million in the third quarter of 2019
-- Total revenues decreased 4% on a GAAP and non-GAAP constant currency
basis versus third quarter 2019
-- Excluding TMR, third quarter revenues decreased 2% on a GAAP and
non-GAAP constant currency basis versus third quarter 2019
-- Achieved net loss of ($2.9) million, or ($0.08) per share
-- Achieved non-GAAP net income of $4.9 million, or $0.13 per share
-- Completed acquisition of Ascyrus Medical LLC
CryoLife, Inc. (NYSE: CRY), a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the third quarter ended September 30, 2020.
"Our performance in the third quarter further validated our belief that the majority of products in our portfolio are used in procedures that cannot be postponed or delayed for long. We believe our business is weathering the pandemic well and we continue to progress on our strategic initiatives," commented Pat Mackin, Chairman, President, and Chief Executive Officer. "We saw an improvement in procedure volumes sequentially month to month from July to September with a corresponding increase in revenue growth over those months. Our manufacturing facilities continue to run at near capacity and our supply chain remains largely intact. We have continued to fund R&D programs related to products that we believe will deliver revenue in 2021 and 2022, including our regulatory approvals for U.S. PerClot PMA, BioGlue China and PROACT Mitral. Lastly, we completed the acquisition of Ascyrus Medical LLC, further strengthening our innovative portfolio of products focused on aortic repair and increasing our total addressable market opportunity to over $6 billion, providing us adequate opportunity to drive our financial performance for years to come. Given these achievements in the third quarter, we remain optimistic that we will deliver on our growth strategy and remain in a position of strength through 2021."
Third Quarter Financial Results
Total revenues for the third quarter of 2020 were $65.1 million, reflecting a decrease of (4%) on a GAAP and non-GAAP constant currency basis, both compared to the third quarter of 2019. Revenue performance across all product lines reflected the impact of the COVID-19 pandemic on the number of procedures using our products.
Net loss for the third quarter of 2020 was ($2.9) million, or ($0.08) per fully diluted common share, compared to net loss of ($134,000), or less than $0.01 per fully diluted common share for the third quarter of 2019. Non-GAAP net income for the third quarter of 2020 was $4.9 million, or $0.13 per fully diluted common share, compared to non-GAAP net income of $2.5 million, or $0.07 per fully diluted common share for the third quarter of 2019.
2020 Financial Outlook
Due to continued uncertainties resulting from the COVID-19 pandemic, the Company is not issuing 2020 financial guidance at this time.
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, integration, and severance expense, amortization expense, non-cash interest expense, loss on foreign currency revaluation, stock-based compensation expense, and corporate rebranding expense. 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, November 4, 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 November 11, 2020 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13712302.
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 the majority of products in our portfolio are used in procedures that cannot be postponed or delayed for long; our business is weathering the pandemic well; we continue to progress on our strategic initiatives; certain of our products will deliver revenue in 2021 and 2022; and, with the acquisition of Ascyrus Medical LLC, our portfolio of products focused on aortic repair is strengthened, increases our total addressable market opportunity to over $6 billion, and will provide us adequate opportunity to drive our financial performance for years to come. They also include that we remain optimistic that we will deliver on our growth strategy and remain in a position of strength through 2021. 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 that the benefits anticipated from the Ascyrus Medical LLC transaction may not be achieved and the continued effects of COVID-19 and government mandates implemented to address the pandemic. 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)
(Unaudited)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---
2020 2019 2020 2019
(Unaudited)
(Unaudited)
Revenues:
Products $
45,109 $
47,484 $
128,797 $
147,053
Preservation services 20,022 20,397 56,534 59,472
Total revenues 65,131 67,881 185,331 206,525
Cost of products and preservation services:
Products 12,998 12,706 36,078 41,021
Preservation services 9,001 9,953 26,060 29,043
Total cost of products and preservation services 21,999 22,659 62,138 70,064
Gross margin 43,132 45,222 123,193 136,461
Operating expenses:
General, administrative, and marketing 33,743 34,259 105,033 105,402
Research and development 5,755 6,259 17,633 17,648
Total operating expenses 39,498 40,518 122,666 123,050
Operating income 3,634 4,704 527 13,411
Interest expense 4,940 3,555 11,980 11,260
Interest income (13) (259) (181) (608)
Other expense, net 2,888 2,400 5,810 2,662
(Loss) income before income taxes (4,181) (992) (17,082) 97
Income tax benefit (1,311) (858) (3,858) (2,304)
Net (loss) income $
(2,870) $
(134) $
(13,224) $
2,401
===
(Loss) income per common share:
Basic $
(0.08) $
(0.00) $
(0.35) $
0.06
===
Diluted $
(0.08) $
(0.00) $
(0.35) $
0.06
===
Weighted-average common shares outstanding:
Basic 37,912 37,255 37,608 37,065
Diluted 37,912 37,255 37,608 37,850
Net (loss) income $
(2,870) $
(134) $
(13,224) $
2,401
Other comprehensive income (loss):
Foreign currency translation adjustments 8,698 (8,017) 8,669 (8,803)
Comprehensive income (loss) $
5,828 $
(8,151) $
(4,555) $
(6,402)
===
CryoLife, Inc. and Subsidiaries
Financial Highlights
(In thousands)
(Unaudited)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---
2020 2019 2020 2019
---
Products:
BioGlue $
15,811 $
15,679 $
44,985 $
50,834
JOTEC 15,290 15,774 43,932 48,936
On-X 12,067 12,610 34,385 36,751
PhotoFix 1,134 1,087 3,056 2,752
PerClot 724 980 2,081 2,814
CardioGenesis cardiac laser therapy 83 1,354 358 4,966
Total products 45,109 47,484 128,797 147,053
Preservation services:
Cardiac tissue $
10,679 $
11,304 28,758 30,734
Vascular tissue 9,285 9,093 27,657 28,738
NeoPatch 58 119
Total preservation services 20,022 20,397 56,534 59,472
Total revenues $
65,131 $
67,881 $
185,331 $
206,525
===
Revenues:
U.S. $
36,332 $
37,981 $
103,171 $
113,548
International 28,799 29,900 82,160 92,977
Total revenues $
65,131 $
67,881 $
185,331 $
206,525
===
(Unaudited)
September 30, December 31,
2020 2019
Cash, cash
equivalents, and
restricted
securities $
64,635 $
34,294
Total current
assets 233,699 187,390
Total assets 782,200 605,654
Total current
liabilities 53,667 45,195
Total liabilities 456,434 319,958
Shareholders'
equity 325,766 285,696
CryoLife, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Net (Loss) Income and Diluted (Loss) Income Per Common Share
(In thousands, except per share data)
(Unaudited)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---
2020 2019 2020 2019
GAAP:
(Loss) income before
income taxes $
(4,181) $
(992) $
(17,082) $
97
Income tax benefit (1,311) (858) (3,858) (2,304)
Net (loss) income $
(2,870) $
(134) $
(13,224) $
2,401
===
Diluted (loss) income
per common share $
(0.08) $
(0.00) $
(0.35) $
0.06
---
Diluted weighted-average common
shares
outstanding 37,912 37,255 37,608 37,850
Reconciliation of (loss) income
before income taxes,
GAAP
to adjusted net income, non-
GAAP
(Loss) income before
income taxes, GAAP: $
(4,181) $
(992) $
(17,082) $
97
Adjustments:
Amortization expense 3,397 2,660 9,430 7,796
Business development, integration,
and severance expense 6,005 1,250 7,481 2,562
Non-cash interest expense 1,371 407 2,261 1,225
Corporate rebranding expense 321
Adjusted income before income
taxes,
non-GAAP 6,592 3,325 2,411 11,680
Income tax benefit calculated at a
pro forma tax rate of 25% 1,648 831 603 2,920
Adjusted net income,
non-GAAP $
4,944 $
2,494 $
1,808 $
8,760
===
Reconciliation of diluted (loss)
income per common share, GAAP
to adjusted diluted income
per common share, non-GAAP:
Diluted (loss) income
per common share,
GAAP: $
(0.08) $
(0.00) $
(0.35) $
0.06
Adjustments:
Amortization expense 0.09 0.07 0.25 0.20
Business development, integration,
and severance expense 0.16 0.03 0.20 0.06
Non-cash interest expense 0.04 0.01 0.06 0.03
Corporate rebranding expense 0.01
Tax effect of non-GAAP
adjustments (0.07) (0.02) (0.13) (0.06)
Effect of 25% pro forma tax rate (0.01) (0.02) 0.01 (0.06)
Adjusted diluted income
per common share, non-
GAAP $
0.13 $
0.07 $
0.05 $
0.23
===
Diluted weighted-average common
shares
outstanding 38,357 37,940 38,151 37,850
CryoLife, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Revenues and Adjusted EBITDA
(In thousands, except per share data)
(Unaudited)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
---
2020 2019 Growth 2020 2019 Growth
Rate Rate
---
Reconciliation of total revenues, GAAP to
total
revenues, non-GAAP:
Total revenues, GAAP $
65,131 $
67,881 -4% $
185,331 $
206,525 -10%
Impact of changes in currency exchange 4 (1,719)
Total constant currency
revenues, non-GAAP $
65,131 $
67,885 -4% $
185,331 $
204,806 -10%
Reconciliation of total revenues, GAAP to
total
revenues, non-GAAP:
Total revenues, GAAP $
65,131 $
67,881 -4% $
185,331 $
206,525 -10%
Less CardioGenesis cardiac laser therapy (83) (1,354) (358) (4,966)
Total GAAP revenues excluding CardioGenesis 65,048 66,527 -2% 184,973 201,559 -8%
Impact of changes in currency exchange 4 (1,719)
Total constant currency
revenues excluding
CardioGenesis, non-GAAP $
65,048 $
66,531 -2% $
184,973 $
199,840 -7%
(Unaudited)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Reconciliation of net
(loss) income, GAAP to
adjusted EBITDA, non-
GAAP:
Net (loss) income, GAAP $
(2,870) $
(134) $
(13,224) $
2,401
Adjustments:
Depreciation and
amortization expense 5,176 4,526 14,818 13,257
Interest expense 4,940 3,555 11,980 11,260
Business development,
integration, and
severance expense 6,005 1,250 7,481 2,562
Stock-based
compensation expense 2,358 2,462 7,432 6,581
(Income) loss on
foreign currency
revaluation (2,073) 2,419 846 2,669
Corporate rebranding
expense 321
Income tax benefit (1,311) (858) (3,858) (2,304)
Interest income (13) (259) (181) (608)
Adjusted EBITDA, non-
GAAP $
12,212 $
12,961 $
25,615 $
35,818
Contacts:
CryoLife
Gilmartin Group LLC
D. Ashley Lee
Brian Johnston / Lynn Lewis
Executive Vice President,
Chief Financial Officer
and
Phone: 631-807-1986
Chief Operating Officer
investors@cryolife.com
Phone: 770-419-3355
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SOURCE CryoLife, Inc.
