Artivion Reports Third Quarter 2024 Financial Results

Third Quarter Highlights:

    --  Achieved revenue of $95.8 million in the third quarter of 2024 versus
        $87.9 million in the third quarter of 2023, an increase of 9% on a GAAP
        basis and 10% on a non-GAAP constant currency basis
    --  Net loss was ($2.3) million or ($0.05) per fully diluted share and
        non-GAAP net income was $5.0 million or $0.12 per fully diluted share in
        the third quarter of 2024
    --  Adjusted EBITDA increased 28% to $17.7 million in the third quarter of
        2024 compared to $13.9 million in the third quarter of 2023
    --  Submitted first module of the pre-market approval application (PMA) for
        AMDS Hybrid Prosthesis with the U.S. Food and Drug Administration
    --  Enrollment completed in NEXUS TRIOMPHE clinical trial
    --  Received regulatory approval from the National Medical Products
        Administration (NMPA) to commercialize BioGlue Surgical Adhesive in
        China. Commercialization expected in the second half of 2025.

ATLANTA, Nov. 7, 2024 /PRNewswire/ -- Artivion, Inc. (NYSE: AORT), a leading cardiac and vascular surgery company focused on aortic disease, today announced financial results for the third quarter ended September 30, 2024.

"We continued our strong financial performance through the third quarter as our team delivered revenue growth consistent with our expectations while executing on several initiatives designed to drive long-term profitable growth with our expanding, clinically differentiated product portfolio. Revenue growth in the third quarter was driven by year-over-year growth in On-X of 15%, BioGlue of 14% and stent grafts of 12%, all compared to the third quarter of 2023. On a constant currency basis, year-over-year On-X, BioGlue, and stent grafts grew 15%, 14% and 13%, respectively. We also saw continued revenue strength across Asia Pacific and Latin America which grew 23% and 21%, respectively, and on a constant currency basis, 23% and 32%, compared to last year," said Pat Mackin, Chairman, President, and Chief Executive Officer.

Mr. Mackin concluded, "We also achieved important milestones in our R&D pipeline this quarter. First, BioGlue was approved in China. Second, we submitted our first module of the PMA application for AMDS with the FDA keeping us on track for an anticipated approval in Q4 2025. Third, our partner Endospan completed enrollment in its U.S. IDE trial TRIOMPHE, putting it on track for PMA approval in the second half of 2026. Fourth, excellent clinical data on 161 patients from our Evita Open Neo trial was presented as a late breaker at EACTS. That trial was larger than our upcoming Arcevo IDE trial, which gives us confidence the upcoming trial will be successful."

Third Quarter 2024 Financial Results
Total revenues for the third quarter of 2024 were $95.8 million, an increase of 9% on a GAAP basis and 10% on a non-GAAP constant currency basis, both compared to the third quarter of 2023.

Net loss for the third quarter of 2024 was ($2.3) million, or ($0.05) per fully diluted common share, compared to net loss of ($9.8) million, or ($0.24) per fully diluted common share for the third quarter of 2023. Non-GAAP net income for the third quarter of 2024 was $5.0 million, or $0.12 per fully diluted common share, compared to non-GAAP net income of $749,000, or $0.02 per fully diluted common share for the third quarter of 2023. Non-GAAP net income for the third quarter of 2024 includes pretax gains related to foreign currency revaluation of $2.4 million.

2024 Financial Outlook
Artivion is narrowing its revenue guidance and continues to expect constant currency revenue growth of between 10% to 12% for the full year 2024 compared to 2023 and now expects a range of $389 to $396 million for 2024 compared to the previously articulated range of $388 to $396 million. At current rates, the Company expects negligible year-over-year currency impact on the full year 2024 revenues.

Additionally, Artivion continues to expect adjusted EBITDA growth of between 28% and 34% for the full year 2024 compared to 2023 resulting in an expected range of $69 to $72 million for 2024.

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 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 November 7, 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 13748263.

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 $389 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 September 30, 2024. Artivion does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.


                                                                           
            
              Artivion, Inc. and Subsidiaries

                                                   
            
              Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

                                                                         
            
              In Thousands, Except Per Share Data

                                                                                     
            
              (Unaudited)




                                                                                                                                                                       Three Months Ended                    Nine Months Ended
                                                                                                                                                       
             September 30,            
        September 30,


                                                                                                                                                             2024                 2023           2024                 2023



     
              Revenues:



     Products                                                                                                                                            $71,244              $63,747       $215,568             $192,041



     Preservation services                                                                                                                                24,535               24,107         75,661               68,293



     
              Total revenues                                                                                                                            95,779               87,854        291,229              260,334





     
              Cost of products and preservation services:



     Products                                                                                                                                             24,412               21,574         72,707               62,084



     Preservation services                                                                                                                                10,358               10,010         31,243               30,169



     
              Total cost of products and preservation services                                                                                          34,770               31,584        103,950               92,253





     
              Gross margin                                                                                                                              61,009               56,270        187,279              168,081





     
              Operating expenses:



     General, administrative, and marketing                                                                                                               50,017               51,093        130,026              158,699



     Research and development                                                                                                                              6,605                6,421         21,048               21,062



     
              Total operating expenses                                                                                                                  56,622               57,514        151,074              179,761



     Gain from sale of non-financial assets                                                                                                                    -                                              (14,250)



     
              Operating income (loss)                                                                                                                    4,387              (1,244)        36,205                2,570





     Interest expense                                                                                                                                      8,405                6,603         24,535               19,055



     Interest income                                                                                                                                       (366)               (339)       (1,093)               (679)



     Loss on extinguishment of debt                                                                                                                            -                             3,669



     Other (income) expense, net                                                                                                                         (2,386)               1,911              6                5,189





     
              (Loss) income before income taxes                                                                                                        (1,266)             (9,419)         9,088             (20,995)



     Income tax expense                                                                                                                                    1,022                  382          5,964                5,720





     
              Net (loss) income                                                                                                                       $(2,288)            $(9,801)        $3,124            $(26,715)





     
              (Loss) income per share:



     
              Basic                                                                                                                                    $(0.05)             $(0.24)         $0.07              $(0.65)



     
              Diluted                                                                                                                                  $(0.05)             $(0.24)         $0.07              $(0.65)





     
              Weighted-average common shares outstanding:



     Basic                                                                                                                                                41,844               40,881         41,607               40,691



     Diluted                                                                                                                                              41,844               40,881         42,621               40,691





     
              Net (loss) income                                                                                                                       $(2,288)            $(9,801)        $3,124            $(26,715)



     
              Other comprehensive income (loss):



     Foreign currency translation adjustments                                                                                                              8,393              (7,070)         2,529             $(1,423)



     Unrealized (loss) gain from foreign currency intra-entity loans, net of tax                                                                         (2,060)               2,060           (47)               1,855



     
              Comprehensive income (loss)                                                                                                               $4,045            $(14,811)        $5,606            $(26,283)


                                                                                                
              
         Artivion, Inc. and Subsidiaries

                                                                                             
              
         Condensed Consolidated Balance Sheets

                                                                                                          
       
                In Thousands




                                                                                                                                                         September 30, December 31,
                                                                                                                                                                  2024          2023


                                                                                                                                                    (Unaudited)



     
                ASSETS



     
                Current assets:



     Cash and cash equivalents                                                                                                                                $56,173       $58,940



     Trade receivables, net                                                                                                                                    75,686        71,796



     Other receivables                                                                                                                                          2,288         2,342



     Inventories, net                                                                                                                                          84,123        81,976



     Deferred preservation costs, net                                                                                                                          50,421        49,804



     Prepaid expenses and other                                                                                                                                19,267        15,810



     
                Total current assets                                                                                                                        287,958       280,668





     Goodwill                                                                                                                                                 248,745       247,337



     Acquired technology, net                                                                                                                                 135,052       142,593



     Operating lease right-of-use assets, net                                                                                                                  41,206        43,822



     Property and equipment, net                                                                                                                               38,262        38,358



     Other intangibles, net                                                                                                                                    29,527        29,638



     Deferred income taxes                                                                                                                                      1,458         1,087



     Other long-term assets                                                                                                                                    20,936         8,894



     
                Total assets                                                                                                                               $803,144      $792,397





     
                LIABILITIES AND STOCKHOLDERS' EQUITY



     
                Current liabilities:



     Accounts payable                                                                                                                                         $11,146       $13,318



     Current portion of long-term debt                                                                                                                         99,698         1,451



     Accrued expenses                                                                                                                                          15,888        12,732



     Accrued compensation                                                                                                                                      15,236        18,715



     Current maturities of operating leases                                                                                                                     4,513         3,395



     Taxes payable                                                                                                                                              3,521         3,840



     Accrued procurement fees                                                                                                                                   1,456         1,439



     Other current liabilities                                                                                                                                  1,380         2,972



     
                Total current liabilities                                                                                                                   152,838        57,862





     Long-term debt                                                                                                                                           214,270       305,531



     Contingent consideration                                                                                                                                  51,720        63,890



     Non-current maturities of operating leases                                                                                                                41,440        43,977



     Deferred income taxes                                                                                                                                     18,538        21,851



     Deferred compensation liability                                                                                                                            7,930         6,760



     Non-current finance lease obligation                                                                                                                       3,194         3,405



     Other long-term liabilities                                                                                                                                8,475         7,341



     
                Total liabilities                                                                                                                          $498,405      $510,617





     
                Commitments and contingencies





     
                Stockholders' equity:



     Preferred stock                                                                                                                                                -



     Common stock (75,000 shares authorized, 43,392 and 42,569 shares issued in 2024 and 2023, respectively)                                                      434           426



     Additional paid-in capital                                                                                                                               373,264       355,919



     Retained deficit                                                                                                                                        (44,783)     (47,907)



     Accumulated other comprehensive loss                                                                                                                     (9,528)     (12,010)



     Treasury stock, at cost, 1,487 shares as of September 30, 2024  and December 31, 2023                                                                   (14,648)     (14,648)



     
                Total stockholders' equity                                                                                                                  304,739       281,780





     
                Total liabilities and stockholders' equity                                                                                                 $803,144      $792,397


                                                         
              
                Artivion, Inc. and Subsidiaries

                                                  
              
                Condensed Consolidated Statement of Cash Flows

                                                                   
              
                In Thousands

                                                                   
              
                (Unaudited)




                                                                                                                                              Nine Months Ended
                                                                                                                         
               September 30,


                                                                                                                                2024                 2023



     
                Net cash flows from operating activities:



     Net income (loss)                                                                                                       $3,124            $(26,715)





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



     Depreciation and amortization                                                                                           17,910               17,260



     Change in fair value of contingent consideration                                                                      (12,170)              21,900



     Non-cash compensation                                                                                                   11,499               10,466



     Non-cash lease expense                                                                                                   5,860                5,467



     Deferred income taxes                                                                                                  (4,187)             (7,250)



     Non-cash debt extinguishment expense                                                                                     3,669



     Write-down of inventories and deferred preservation costs                                                                2,911                3,726



     Fair value adjustment of Endospan agreements                                                                             (195)               5,000



     Gain from sale of non-financial assets                                                                                       -            (14,250)



     Other                                                                                                                    1,818                2,325



     Changes in operating assets and liabilities:



     Accounts payable, accrued expenses, and other liabilities                                                              (5,237)                 412



     Inventories and deferred preservation costs                                                                            (4,791)            (10,592)



     Prepaid expenses and other assets                                                                                      (4,758)               (527)



     Receivables                                                                                                            (3,356)                 765



     
                Net cash flows provided by operating activities                                                            12,097                7,987





     
                Net cash flows from investing activities:



     Capital expenditures                                                                                                   (9,763)             (7,083)



     Payments for Endospan agreements                                                                                       (7,000)             (5,000)



     Proceeds from sale of non-financial assets, net                                                                              -              14,250



     
                Net cash flows (used in) provided by investing activities                                                (16,763)               2,167





     
                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                                                     5,285                3,467



     Proceeds from financing insurance premiums                                                                                   -               3,558



     Repayment of debt                                                                                                    (211,765)             (2,063)



     Payment of debt issuance costs                                                                                        (10,044)



     Principal payments on short-term notes payable                                                                         (1,027)             (1,522)



     Other                                                                                                                    (420)               (945)



     
                Net cash flows provided by financing activities                                                             2,029                2,495





     Effect of exchange rate changes on cash and cash equivalents                                                             (130)               1,481



     
                (Decrease) increase in cash and cash equivalents                                                          (2,767)              14,130





     Cash and cash equivalents beginning of period                                                                           58,940               39,351



     
                Cash and cash equivalents end of period                                                                   $56,173              $53,481


                                 
             
         Artivion, Inc. and Subsidiaries

                                       
         
             Financial Highlights

                                          
        
               In Thousands

                                          
        
               (Unaudited)




                                                                                       Three Months Ended                    Nine Months Ended
                                                                  
                September 30,            
         September 30,


                                                                         2024                  2023           2024              2023



     
                Products:



     Aortic stent grafts                                             $28,643               $25,523        $92,936           $80,032



     On-X                                                             21,478                18,744         61,804            54,346



     Surgical sealants                                                18,437                16,234         53,963            49,503



     Other                                                             2,686                 3,246          6,865             8,160



     
                Total products                                      71,244                63,747        215,568           192,041





     Preservation services                                            24,535                24,107         75,661            68,293



     
                Total revenues                                     $95,779               $87,854       $291,229          $260,334





     North America                                                    49,089                48,028        148,679           137,541



     Europe, the Middle East, and Africa                              30,423                26,536         98,156            84,608



     Asia Pacific                                                     10,366                 8,402         27,628            24,655



     Latin America                                                     5,901                 4,888         16,766            13,530



     
                Total revenues                                     $95,779               $87,854       $291,229          $260,334


                                           
      
          Artivion, Inc. and Subsidiaries

                                          
      
          Reconciliation of GAAP to Non-GAAP

                                               
        
                Revenues

                                             
        
                In Thousands

                                             
        
                (Unaudited)




                                                                           
              
               Revenues for the                                            Percent

                                                                          
              
               Three Months Ended                                           Change

                                                                            
              
               September 30,                                            From Prior

                                                                                                                                                                   Year


                                                    2024                                                                                       2023


                                                 US GAAP                                US GAAP                            Exchange            Constant                 Constant
                                                                                                               Rate Effect            Currency             Currency



     
                Products:



     Aortic stent grafts                        $28,643                                 $25,523                               $(208)             $25,315                       13 %



     On-X                                        21,478                                  18,744                                (103)              18,641                       15 %



     Surgical sealants                           18,437                                  16,234                                (128)              16,106                       14 %



     Other                                        2,686                                   3,246                                    1                3,247                      -17 %



     
                Total products                 71,244                                  63,747                                (438)              63,309                       13 %





     Preservation services                       24,535                                  24,107                                 (22)              24,085                        2 %



     
                Total                         $95,779                                 $87,854                               $(460)             $87,394                       10 %





     North America                               49,089                                  48,028                                 (50)              47,978                        2 %



     Europe, the Middle East, and Africa         30,423                                  26,536                                   12               26,548                       15 %



     Asia Pacific                                10,366                                   8,402                                    1                8,403                       23 %



     Latin America                                5,901                                   4,888                                (423)               4,465                       32 %



     
                Total                         $95,779                                 $87,854                               $(460)             $87,394                       10 %


                                                   
       
               Revenues for the                                              Percent

                                                   
       
               Nine Months Ended                                             Change

                                                     
       
               September 30,                                             From Prior

                                                                                                                                  Year


                                              2024                                                                 2023


                                           US GAAP        US GAAP                              Exchange            Constant               Constant
                                                                                   Rate Effect            Currency              Currency



     
                Products:



     Aortic stent grafts                  $92,936         $80,032                                    688              $80,720                     15 %



     On-X                                  61,804          54,346                                    (2)              54,344                     14 %



     Surgical sealants                     53,963          49,503                                   (10)              49,493                      9 %



     Other                                  6,865           8,160                                      4                8,164                    -16 %



     
                Total products          215,568         192,041                                    680              192,721                     12 %





     Preservation services                 75,661          68,293                                   (26)              68,267                     11 %



     
                Total                  $291,229        $260,334                                   $654             $260,988                     12 %





     North America                        148,679         137,541                                   (57)             137,484                      8 %



     Europe, the Middle East, and Africa   98,156          84,608                                    994               85,602                     15 %



     Asia Pacific                          27,628          24,655                                                     24,655                     12 %



     Latin America                         16,766          13,530                                  (283)              13,247                     27 %



     
                Total                  $291,229        $260,334                                   $654             $260,988                     12 %


                                                                                             
              
                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                            Nine Months Ended
                                                                                                                                                                                
              September 30,          
             September 30,


                                                                                                                                                                                      2024                 2023              2024                2023



     
                
                  Reconciliation of G&A expense, GAAP to adjusted G&A, non-GAAP:



     General, administrative, and marketing expense, GAAP                                                                                                                         $50,017              $51,093          $130,026            $158,699



       Business development, integration, and severance expense (income)                                                                                                            3,431                6,363          (11,923)             22,461



       Corporate rebranding expense                                                                                                                                                     -                  65                                  283



     
                Adjusted G&A, non-GAAP                                                                                                                                          $46,586              $44,665          $141,949            $135,955




                                                                                                                                                                                                     Three Months Ended                            Nine Months Ended
                                                                                                                                                                                
              September 30,          
             September 30,


                                                                                                                                                                                      2024                 2023              2024                2023



     
                
                  Reconciliation of net loss, GAAP to adjusted EBITDA, non-GAAP:



     Net (loss) income, GAAP                                                                                                                                                     $(2,288)            $(9,801)           $3,124           $(26,715)



     Adjustments:



     Interest expense                                                                                                                                                               8,405                6,603            24,535              19,055



     Depreciation and amortization expense                                                                                                                                          6,110                5,759            17,910              17,260



       Business development, integration, and severance expense (income)                                                                                                            3,431                6,122          (11,923)             26,844



     Stock-based compensation expense                                                                                                                                               3,769                3,187            11,499              10,466



     Income tax expense                                                                                                                                                             1,022                  382             5,964               5,720



     Loss on extinguishment of debt                                                                                                                                                     -                                3,669



     Interest income                                                                                                                                                                (366)               (339)          (1,093)              (679)



     (Gain) loss on foreign currency revaluation                                                                                                                                  (2,382)               1,882              (29)                112



       Abandonment of CardioGenesis Cardiac laser therapy business                                                                                                                      -                                                     390



     Corporate rebranding expense                                                                                                                                                       -                  65                                  283



     Gain from sale of non-financial assets                                                                                                                                             -                                                (14,250)



     
                Adjusted EBITDA, non-GAAP                                                                                                                                       $17,701              $13,860           $53,656             $38,486




                                                                                                                                                                                                     Three Months Ended                            Nine Months Ended
                                                                                                                                                                                
              September 30,          
             September 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                                                                                                                              $11,455               $7,232           $12,097              $7,987



     Capital expenditures                                                                                                                                                         (3,639)             (2,068)          (9,763)            (7,083)



     
                Free cash flows, non-GAAP                                                                                                                                        $7,816               $5,164            $2,334                $904


                                                                                                                                                               
              
                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                       Nine Months Ended
                                                                                                                                                                                                                                       September 30,                    September 30,


                                                                                                                                                                                                                                  2024            2023              2024              2023



              
                
                  GAAP:



              
                (Loss) income before income taxes                                                                                                                                                                 $(1,266)       $(9,419)           $9,088         $(20,995)



              Income tax expense                                                                                                                                                                                                1,022             382             5,964             5,720



              
                Net (loss) income                                                                                                                                                                                 $(2,288)       $(9,801)           $3,124         $(26,715)





              
                Diluted (loss) income per common share                                                                                                                                                             $(0.05)        $(0.24)            $0.07           $(0.65)





              
                Diluted weighted-average common shares outstanding                                                                                                                                                  41,844          40,881            42,621            40,691





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



              
                (Loss) income before income taxes, GAAP:                                                                                                                                                          $(1,266)       $(9,419)           $9,088         $(20,995)



              Adjustments:



                 Business development, integration, and severance expense (income)                                                                                                                                              3,431           6,122          (11,923)           26,844



                 Amortization expense                                                                                                                                                                                           3,990           3,766            11,650            11,453



                 Loss on extinguishment of debt                                                                                                                                                                                     -                           3,669



                 Non-cash interest expense                                                                                                                                                                                        546             465             1,610             1,391



                 Abandonment of CardioGenesis Cardiac laser therapy business                                                                                                                                                        -                                              390



                 Corporate rebranding expense                                                                                                                                                                                       -             65                                283



                 Gain from sale of non-financial assets                                                                                                                                                                             -                                         (14,250)



              
                   Adjusted income before income taxes, non-GAAP                                                                                                                                                     6,701             999            14,094             5,116




    Income tax expense calculated at a tax rate of 25%                                                                                                                                                                         1,675             250             3,523             1,279



              
                   Adjusted net income, non-GAAP                                                                                                                                                                    $5,026            $749           $10,571            $3,837





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



              
                Diluted (loss) income per common share, GAAP:                                                                                                                                                      $(0.05)        $(0.24)            $0.07           $(0.65)



              Adjustments:



                 Business development, integration, and severance expense (income)                                                                                                                                               0.08            0.15            (0.28)             0.65



                 Amortization expense                                                                                                                                                                                            0.09            0.09              0.27              0.28



                 Loss on extinguishment of debt                                                                                                                                                                                     -                            0.09



                 Non-cash interest expense                                                                                                                                                                                       0.02            0.01              0.04              0.03



                 Abandonment of CardioGenesis Cardiac laser therapy business                                                                                                                                                        -                                             0.01



                 Corporate rebranding expense                                                                                                                                                                                       -                                             0.01



                 Gain from sale of non-financial assets                                                                                                                                                                             -                                           (0.34)



                 Tax effect of non-GAAP adjustments                                                                                                                                                                            (0.05)         (0.06)           (0.03)           (0.17)



                 Effect of 25% tax rate                                                                                                                                                                                          0.03            0.07              0.09              0.27



              
                   Adjusted diluted income per common share, non-GAAP                                                                                                                                                $0.12           $0.02             $0.25             $0.09





              
                
                  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:                                                                                                                                           41,844          40,881            42,621            40,691



              Adjustments:



                 Effect of dilutive stock options and awards                                                                                                                                                                    1,160             662                                512



              
                   Diluted weighted-average common shares outstanding, non-GAAP                                                                                                                                     43,004          41,543            42,621            41,203



     
                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

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SOURCE Artivion, Inc.