CryoLife Reports Fourth Quarter and Full Year 2020 Financial Results

ATLANTA, Feb. 11, 2021 /PRNewswire/ --

Fourth Quarter and Recent Business Highlights:

    --  Achieved total revenues of $67.9 million in the fourth quarter 2020
        versus $69.7 million in the fourth quarter of 2019
        --  Total revenues decreased 3% on a GAAP basis and 5% on a non-GAAP
            proforma constant currency basis versus fourth quarter 2019
        --  Excluding TMR, fourth quarter revenues decreased 2% on a non-GAAP
            proforma basis and 3% on a non-GAAP proforma constant currency basis
            versus fourth quarter 2019
    --  Achieved net loss of ($3.5) million, or ($0.09) per share
    --  Achieved non-GAAP net income of $7.9 million, or $0.20 per share

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

"Despite the ongoing impact of COVID-19 on our business, we were able to generate solid quarterly results and advance our key operational goals. We completed the integration of Ascyrus, launched our newest JOTEC products, and made good progress on enrollment in our PROACT Xa clinical trial," commented Pat Mackin, Chairman, President, and Chief Executive Officer. "Additionally, our manufacturing facilities continued to run at near capacity and our supply chain remains largely intact. We also continued to invest in our commercial channels and R&D programs related to products that we believe will deliver revenue in 2021 and 2022, including our regulatory approvals for U.S. PerClot, BioGlue China and PROACT Mitral. We also progressed in our efforts to obtain regulatory approval for Ascyrus in the US and other countries. These fundamental drivers, combined with declining COVID-19 infection rates and accelerating vaccination programs in various regions around the world, make us optimistic that the second half of 2021 should be the start of a prolonged period of growth for CryoLife."

Fourth Quarter 2020 Financial Results
Total revenues for the fourth quarter of 2020 were $67.9 million, reflecting a decrease of 3% on a GAAP basis and a decrease of 5% on a non-GAAP proforma constant currency basis, both compared to the fourth 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 fourth quarter of 2020 was $(3.5) million, or $(0.09) per fully diluted common share, compared to net loss of ($0.7) million, or ($0.02) per fully diluted common share for the fourth quarter of 2019. Non-GAAP net income for the fourth quarter of 2020 was $7.9 million, or $0.20 per fully diluted common share, compared to non-GAAP net income of $4.2 million, or $0.11 per fully diluted common share for the fourth quarter of 2019. Loss for the fourth quarter of 2020 includes pretax expense of $4.8 million of business development costs primarily related to the Ascyrus acquisition, partially offset by pretax benefit of $1.2 million resulting from a change in the Company's paid time off policy and a non-cash pretax benefit of $3.0 million related to the reversal of performance-based stock compensation because financial targets were not met due to the impact of COVID-19.

Full Year 2020 Financial Results
Total revenues for 2020 were $253.2 million, reflecting a decrease of 8% on both a GAAP and non-GAAP proforma constant currency basis, both compared to the full year 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 2020 was ($16.7) million, or ($0.44) per fully diluted common share, compared to net income of $1.7 million, or $0.05 per fully diluted common share for the full year of 2019. Non-GAAP net income for the full year of 2020 was $9.7 million, or $0.25 per fully diluted common share, compared to non-GAAP net income of $12.9 million, or $0.34 per fully diluted common share for the full year of 2019. Loss for the full year of 2020 includes pretax expense of $12.3 million of business development costs primarily related to the Ascyrus and Endospan transactions, partially offset by pretax benefit of $1.2 million resulting from a change in the Company's paid time off policy and a non-cash pretax benefit of $3.0 million related to the reversal of performance-based stock compensation because financial targets were not met due to the impact of COVID-19.

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.

2021 Financial Outlook
Due to continued uncertainties resulting from the COVID-19 global pandemic, the Company is not issuing 2021 financial guidance at this time.

The Company's financial performance for 2021 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; depreciation and amortization expense; interest income and expense; non-cash interest expense; loss on foreign currency revaluation; stock-based compensation expense; corporate rebranding expense; and income tax expense (benefit). 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, February 11, 2021 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 February 18, 2021 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13715710.

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. Readers are cautioned not to place undue reliance on these foreword-looking statements, which are made as of the date of this press release and reflect the view of management as of the date of this press release. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include our beliefs that, despite the ongoing impact of COVID-19 on our business, we were able to generate solid quarterly results, advance on our key operational goals, and make good progress on enrollment in our PROACT Xa clinical trial; our R&D programs in which we continued to invest in 2020, such as U.S. PerClot, BioGlue China and PROACT Mitral, will deliver revenue in 2021 and 2022, and our fundamental drivers, combined with declining COVID-19 infection rates and accelerating vaccination programs in various regions around the world, starting in the second half of 2021, should lead to a prolonged period of growth 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, 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 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, 2020. CryoLife does not assume any obligation, and expressly disclaims any duty to update any of 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)


                                                                                              Three Months Ended            Twelve Months Ended


                                                                                                 December 31,                   December 31,

                                                                                                                          ---

                                                                                                       2020                  2019                                2020                2019



     
              Revenues:



     Products                                                                               $
            50,502         $
         50,193                      $
         179,299       $
        197,246



     Preservation services                                                                          17,394                19,504                              73,928              78,976




     
              Total revenues                                                                      67,896                69,697                             253,227             276,222






     
              Cost of products and preservation services:



     Products                                                                                       14,050                14,001                              50,128              55,022



     Preservation services                                                                           9,255                 9,144                              35,315              38,187




     
              Total cost of products and preservation services                                    23,305                23,145                              85,443              93,209






     
              Gross margin                                                                        44,591                46,552                             167,784             183,013






     
              Operating expenses:



     General, administrative, and marketing                                                         36,103                37,609                             141,136             143,011



     Research and development                                                                        6,574                 5,312                              24,207              22,960




     
              Total operating expenses                                                            42,677                42,921                             165,343             165,971






     
              Operating income                                                                     1,914                 3,631                               2,441              17,042






     Interest expense                                                                                4,718                 3,626                              16,698              14,886



     Interest income                                                                                  (36)                (130)                              (217)              (738)



     Other (income) expense, net                                                                   (2,676)              (1,412)                              3,134               1,250






     
              (Loss) income before income taxes                                                     (92)                1,547                            (17,174)              1,644



     Income tax expense (benefit)                                                                    3,366                 2,228                               (492)               (76)






     
              Net (loss) income                                               $
            
              (3,458)     $
     
           (681)              $
       
           (16,682)   $
      
          1,720

                                                                                                                                                                                     ===




     
              (Loss) income per common share:



     
              Basic                                                            $
            
              (0.09)               (0.02)                $
       
           (0.44)    $
      
          0.05

                                                                                                                                                                                     ===


     
              Diluted                                                          $
            
              (0.09)               (0.02)                $
       
           (0.44)    $
      
          0.05

                                                                                                                                                                                     ===




     
              Weighted-average common shares outstanding:



     Basic                                                                                          38,613                37,274                              37,861              37,118



     Diluted                                                                                        38,613                37,274                              37,861              37,860


                                                
            
            CryoLife, Inc. and Subsidiaries


                                                    
          
                Financial Highlights


                                                       
          
                (In thousands)




                                                       
          Unaudited                              
           Unaudited


                                                                Three Months Ended                            Twelve Months Ended


                                                                   December 31,                                   December 31,

                                                                                                           ---

                                               2020                                   2019                          2020            2019

                                                                                                                                  ---


     
                Products:



     BioGlue                                                $
              17,083                         $
           17,777                       $
        62,068      $
        68,611



     Aortic stents and stent grafts                                   17,731                                  16,038                             61,663            64,974



     On-X                                                             13,668                                  13,345                             48,053            50,096



     PhotoFix                                                          1,113                                   1,002                              4,169             3,754



     PerClot                                                             801                                     981                              2,882             3,795



     CardioGenesis cardiac laser therapy                                 106                                   1,050                                464             6,016




     
                          Total products                            50,502                                  50,193                            179,299           197,246





     
                Preservation services:



     Cardiac tissue                                                    9,135                                  10,145                       $
        37,893      $
        40,879



     Vascular tissue                                                   8,195                                   9,359                             35,852            38,097



     NeoPatch                                   64                                                                                183




     
                Total preservation services                         17,394                                  19,504                             73,928            78,976





     
                Total revenues                   $
          
                67,896                   $
       
             69,697                  $
     
          253,227 $
     
          276,222

                                                                                                                                                                      ===




     
                Revenues:



     U.S.                                                   $
              35,103                         $
           37,005                      $
        138,274     $
        150,553



     International                                                    32,793                                  32,692                            114,953           125,669




     
                Total revenues                   $
          
                67,896                   $
       
             69,697                  $
     
          253,227 $
     
          276,222

                                                                                                                                                                      ===


                                 December 31,            December 31,


                                         2020                     2019



      Cash, cash equivalents,
       and restricted securities              $
      61,958               $
      34,294


      Total current assets                       234,589                  187,390



     Total assets                               789,404                  605,654


      Total current liabilities                   60,468                   45,195


      Total liabilities                          460,691                  319,958


      Shareholders' equity                       328,713                  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                  Twelve Months Ended


                                                                                                                                                              December 31,                        December 31,

                                                                                                                                                                                           ---

                                                                                                                                                                    2020                        2019                                         2020                     2019




              
                
                  GAAP:



              
                (Loss) income before income taxes                                                                                $
              
                (92)       $
        
            1,547                     $
           
          (17,174)   $
         
            1,644



              Income tax expense (benefit)                                                                                                                        3,366                       2,228                                        (492)                    (76)




              
                Net (loss) income                                                                                             $
              
                (3,458)       $
        
            (681)                    $
           
          (16,682)   $
         
            1,720

                                                                                                                                                                                                                                                                      ===




              
                Diluted (loss) income per common share:                                                                        $
              
                (0.09)      $
        
            (0.02)                      $
           
          (0.44)    $
         
            0.05

                                                                                                                                                                                                                                                                      ---




              
                Diluted weighted-average common



              
                shares outstanding                                                                                                                    38,613                      37,274                                       37,861                   37,860





              
                
                  Reconciliation of (loss) income before income taxes,



              
                
                  GAAP to adjusted net income, non-GAAP



              
                (Loss) income before income taxes, GAAP                                                                          $
              
                (92)       $
        
            1,547                     $
           
          (17,174)   $
         
            1,644



              Adjustments:



              Business development, integration, and severance expense                                                                                            4,839                         526                                       12,320                    3,088



              Amortization expense                                                                                                                                4,334                       3,054                                       13,764                   10,850



              Non-cash interest expense                                                                                                                           1,395                         406                                        3,656                    1,631



              Corporate rebranding expense                                                                                          15                                                                              336




              
                Adjusted income before income taxes,



              
                non-GAAP                                                                                                                              10,491                       5,533                                       12,902                   17,213





              Income tax expense calculated at a


    pro forma tax rate of 25%                                                                                                                                    2,623                       1,383                                        3,226                    4,303




              
                Adjusted net income, non-GAAP                                                                                   $
              
                7,868        $
        
            4,150                        $
          
           9,676   $
         
            12,910

                                                                                                                                                                                                                                                                      ===




              
                
                  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:                                                                  $
              
                (0.09)      $
        
            (0.02)                      $
           
          (0.44)    $
         
            0.05



              Adjustments:



              Business development, integration, and severance expense                                                                                             0.12                        0.02                                         0.32                     0.28



              Amortization expense                                                                                                                                 0.11                        0.08                                         0.36                     0.08



              Non-cash interest expense                                                                                                                            0.04                        0.01                                         0.09                     0.04



              Effect of 25% pro forma tax rate                                                                                                                     0.09                        0.05                                         0.10                   (0.01)



              Corporate rebranding expense                                                                                                                                                                        0.01



              Tax effect of non-GAAP adjustments                                                                                                                 (0.07)                     (0.03)                                      (0.19)                  (0.10)



              
                Adjusted diluted income per common share,



              
                 non-GAAP:                                                                                                       $
              
                0.20         $
        
            0.11                         $
          
           0.25     $
         
            0.34

                                                                                                                                                                                                                                                                      ===




              
                Diluted weighted-average common



              
                shares outstanding                                                                                                                    39,100                      37,914                                       38,369                   37,860


                                                                                                         
              
           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                                
             
                Twelve Months Ended


                                                                                        
           
            December 31,                                       
             
                December 31,

                                                                                                                                                                           ---

                                                                                      2020                                 2019                                  Growth                            2020                   2019        Growth
                                                                                                                                                    Rate                                                                        Rate

                                                                                                                                                                                                                                     ---


              
                
                  Reconciliation of total revenues, GAAP to



              
                
                  total revenues, non-GAAP:



              Total revenues, GAAP                                                                $
              67,896                                         $
             69,697          -3%                       $
       253,227                            $
       276,222   -8%



              Including AMDS prior to acquisition                                                                                        547                                                            2,088                                   2,339




              
                Total GAAP revenues including                                                    67,896                                                    70,244          -3%                            255,315                                 278,561   -8%
    AMDS



              Impact of changes in currency exchange                                                                                   1,024                                                                                                   (708)




              
                Total constant currency revenues including                     $
         
                67,896                            $
              
               71,268          -5%                   $
     
         255,315                        $
     
         277,853   -8%
    AMDS, non-GAAP






              
                
                  Reconciliation of total revenues, GAAP to



              
                
                  total revenues, non-GAAP:



              Total revenues, GAAP                                                                $
              67,896                                         $
             69,697          -3%                       $
       253,227                            $
       276,222   -8%



              Including AMDS prior to acquisition                                                                                        547                                                            2,088                                   2,339



              Excluding CardioGenesis cardiac laser therapy                         (106)                                            (1,050)                                                           (464)                                (6,016)




              
                Total GAAP revenues including                                                    67,790                                                    69,194          -2%                            254,851                                 272,545   -6%
    AMDS and excluding CardioGenesis



              Impact of changes in currency exchange                                                                                   1,024                                                                                                   (708)




              
                Total constant currency revenues including                     $
         
                67,790                            $
              
               70,218          -3%                   $
     
         254,851                        $
     
         271,837   -6%
    AMDS and excluding CardioGenesis, non-GAAP


                                                                                     
     (Unaudited)                              
     (Unaudited)


                                                                                          Three Months Ended                        Twelve Months Ended


                                                                                             December 31,                               December 31,



                                                                                                        2020               2019                                         2020 2019




           
                
                  Reconciliation of net (loss) income, GAAP to



           
                
                  adjusted EBITDA, non-GAAP:



           Net (loss) income, GAAP                                                                             $
     (3,458)                                  $
       (681)               $
       (16,682)      $
     1,720



           Adjustments:



           Depreciation and amortization expense                                                                    5,894                                        5,060                       20,712         18,317



           Interest expense                                                                                         4,718                                        3,626                       16,698         14,886



           Business development, integration, and severance                                                         4,839                                          526                       12,320          3,088
    expense



           Stock-based compensation expense                                                                         (520)                                       2,218                        6,912          8,799



           Corporate rebranding expense                                                                                15                                                                      336



           Interest income                                                                                           (36)                                       (130)                       (217)         (738)



           Income tax expense (benefit)                                                                             3,366                                        2,228                        (492)          (76)



           (Income) loss on foreign currency revaluation                                                          (2,688)                                     (1,437)                     (1,829)         1,232




           
                Adjusted EBITDA, non-GAAP                                                           $
     
       12,130                              $
     
         11,410           $
        
         37,758 $
      
       47,228


                   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.