Artivion Reports Fourth Quarter and Full Year 2021 Financial Results

bArtivion, Inc., a leading cardiac and vascular surgery company focused on aortic disease, announced its financial results for the fourth quarter and full year ended December 31, 2021.

ATLANTA, Feb. 17, 2022 /PRNewswire/ --

Fourth Quarter and Recent Business Highlights:

  • Achieved record revenue of $79.4 million in the fourth quarter 2021 versus $67.9 million in the fourth quarter of 2020, an increase of 16.9% on a GAAP basis and 18.8 % on a non-GAAP proforma constant currency basis
  • Received FDA approval to launch enrollment in AMDS clinical trial
  • Filed PMA with FDA for US PerClot Approval in October 2021

Artivion, Inc. (NYSE: AORT), a leading cardiac and vascular surgery company focused on aortic disease, today announced its financial results for the fourth quarter and full year ended December 31, 2021.

“In the fourth quarter we achieved record quarterly revenues, driven by our aortic stent grafts and continued strength in our US On-X aortic valve business. We also saw meaningful growth across APAC and LATAM as we continue to expand our commercial footprint and secure additional regulatory approvals in those regions,” said Pat Mackin, Chairman, President, and Chief Executive Officer.

“In addition to our commercial and regulatory success, we also continued to advance our product pipeline, which is expected to drive growth in both the near and longer terms. We believe we are on track to receive FDA PMA approval for PROACT Mitral and for PerClot this year. Meanwhile, we have made significant progress with enrollment in our PROACT Xa trial and have advanced several other programs that are expected to deliver incremental growth beginning in 2025.”

“Despite the unprecedented challenges due to the COVID-19 pandemic, we were able to execute on our key initiatives. We expect that momentum to continue as reflected in our positive financial outlook. The rollout of our new corporate branding is timely as we are now firmly established in the marketplace as an innovator and leader in the treatment of aortic repair.”

Fourth Quarter 2021 Financial Results
Total revenues for the fourth quarter of 2021 were $79.4 million, reflecting an increase of 16.9% on a GAAP basis and 18.8% on a non-GAAP proforma constant currency basis, both compared to the fourth quarter of 2020.

Net loss for the fourth quarter of 2021 was ($20.1) million, or ($0.51) per fully diluted common share, compared to net loss of ($3.5) million, or ($0.09) per fully diluted common share for the fourth quarter of 2020. Non-GAAP net loss for the fourth quarter of 2021 was ($141,000), or ($0.00) per fully diluted common share, compared to non-GAAP net income of $7.9 million, or $0.20 per fully diluted common share for the fourth quarter of 2020. GAAP net loss for the fourth quarter of 2021 includes pretax expense of $10.4 million for business development expenses primarily related to non-cash charges from the Ascyrus and Endospan transactions and $2.4 million of losses due to foreign currency.

Full Year 2021 Financial Results
Total revenues for 2021 were $298.8 million, reflecting an increase of 18.0% on a GAAP basis and 15.8% on a non-GAAP proforma constant currency basis compared to the full year of 2020.

Net loss for 2021 was ($14.8) million, or ($0.38) per fully diluted common share, compared to net loss of ($16.7) million, or ($0.44) per fully diluted common share for the full year of 2020. Non-GAAP net income for the full year of 2021 was $4.9 million, or $0.12 per fully diluted common share, compared to non-GAAP net income of $9.7 million, or $0.25 per fully diluted common share for the full year of 2020. GAAP net loss for the full year of 2021 includes pretax expense of $16.6 million for business development expenses primarily related to non-cash charges from the Ascyrus and Endospan transactions and $5.5 million of losses due to foreign currency, partially offset by a pretax gain of $15.9 million resulting from the sale of our PerClot product line.

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 and the Company’s filing of its annual report on Form 10-K.

2022 Financial Outlook
Artivion expects constant currency revenue growth of between 9.0% and 11.0% for the full year 2022 compared to the full year 2021. Assuming a Euro/USD exchange rate of 1.13 and the related 2%, or approximately $6.0 million revenue headwind compared to 2021, revenues are expected to be in the range of $319.0 million to $325.0 million.

The Company’s financial performance for 2022 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 EBITDA, non-GAAP general, administrative, and marketing, and non-GAAP adjusted operating income. 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 revenues of acquired and divested product lines and the impact of changes in currency exchange. The Company’s non-GAAP net income; non-GAAP EBITDA; non-GAAP general, administrative, and marketing; and non-GAAP adjusted operating income results exclude (as applicable) business development, integration, and severance expense; gain from sale of non-financial assets; depreciation and amortization expense; interest income and expense; non-cash interest expense; loss (gain) on foreign currency revaluation; stock-based compensation expense; corporate rebranding expense; and income tax expense (benefit). 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 acquisitions, or 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 acquired and divested product lines and 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 non-GAAP to GAAP financial measures.

Webcast and Conference Call Information
The Company will hold a teleconference call and live webcast later today, February 17, 2022 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 13725524.

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 stents and 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 our beliefs that we expect our product pipeline to drive growth in both the near and longer terms; we are on track to receive FDA PMA approval for PROACT Mitral and for PerClot this year; we have made significant progress with enrollment in our PROACT Xa trial and have advanced several other programs that are expected to deliver incremental growth beginning in 2025; we expect our momentum gained as a result of executing on our key initiatives to continue as reflected in our positive financial outlook; and that we believe the rollout of our new corporate branding firmly establishes us in the marketplace as an innovator and leader in the treatment of aortic repair. 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 and Endospan agreements may not be achieved; the benefits anticipated from our clinical trials may not be achieved or achieved on our anticipated timeline; our existing products may not be able to consistently retain their existing regulatory approvals; products in our pipeline may not receive regulatory approval or receive regulatory approval on our anticipated timelines; our products that obtain regulatory approval may not be adopted by the market as much as we anticipate or at all; and the continued effects of COVID-19, including new COVID-19 variants, hospital staffing shortages, decelerating vaccination or vaccine adoption rates, or government mandates implemented to address the effects of 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, 2021. 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

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share data)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2021

2020

2021

2020

Revenues:

Products

$

59,069

$

50,502

$

221,597

$

179,299

Preservation services

20,325

17,394

77,239

73,928

Total revenues

79,394

67,896

298,836

253,227

Cost of products and preservation services:

Products

18,604

14,050

65,196

50,128

Preservation services

9,416

9,255

36,126

35,315

Total cost of products and preservation services

28,020

23,305

101,322

85,443

Gross margin

51,374

44,591

197,514

167,784

Operating expenses:

General, administrative, and marketing

51,253

36,103

169,774

141,136

Research and development

9,460

6,574

35,546

24,207

Total operating expenses

60,713

42,677

205,320

165,343

Gain from sale of non-financial assets

--

--

(15,923)

--

Operating (loss) income

(9,339)

1,914

8,117

2,441

Interest expense

3,892

4,718

16,887

16,698

Interest income

(19)

(36)

(79)

(217)

Other expense (income), net

2,875

(2,676)

6,136

3,134

Loss before income taxes

(16,087)

(92)

(14,827)

(17,174)

Income tax expense (benefit)

4,013

3,366

7

(492)

Net loss

$

(20,100)

$

(3,458)

$

(14,834)

$

(16,682)

Loss per common share:

Basic

$

(0.51)

(0.09)

$

(0.38)

$

(0.44)

Diluted

$

(0.51)

(0.09)

$

(0.38)

$

(0.44)

Weighted-average common shares outstanding:

Basic

39,161

38,613

38,983

37,861

Diluted

39,161

38,613

38,983

37,861

Artivion, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

December 31,

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$

55,010

$

61,412

Restricted securities

--

546

Trade receivables, net

53,019

45,964

Other receivables

5,086

2,788

Inventories, net

76,971

73,038

Deferred preservation costs, net

42,863

36,546

Prepaid expenses and other

14,748

14,295

Total current assets

247,697

234,589

Goodwill

250,000

260,061

Acquired technology, net

166,994

186,091

Operating lease right-of-use assets, net

45,714

18,571

Property and equipment, net

37,521

33,077

Other intangibles, net

34,502

40,966

Deferred income taxes

2,357

1,446

Other long-term assets

8,267

14,603

Total assets

$

793,052

$

789,404

Artivion, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

December 31,

2021

2020

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

10,395

$

9,623

Accrued expenses

7,687

7,472

Accrued compensation

13,163

10,192

Taxes payable

3,634

2,808

Accrued procurement fees

3,689

3,619

Current portion of finance lease obligation

528

614

Current maturities of operating leases

3,149

5,763

Current portion of long-term debt

1,630

1,195

Current portion of contingent consideration

--

16,430

Other

1,078

2,752

Total current liabilities

44,953

60,468

Long-term debt

307,493

290,468

Contingent consideration

49,400

43,500

Non-current maturities of operating leases

44,869

14,034

Non-current finance lease obligations

4,374

5,300

Deferred income taxes

28,799

34,713

Deferred compensation liability

5,952

5,518

Other

6,484

6,690

Total liabilities

492,324

460,691

Commitments and contingencies

Shareholders’ equity:

Preferred stock $0.01 par value per share, 5,000 shares authorized, no shares issued

--

--

Common stock $0.01 par value per share, 75,000 shares authorized,

41,397 and 40,394 shares issued as of December 31, 2021 and 2020, respectively

414

404

Additional paid-in capital

322,874

316,192

Retained earnings

1,975

20,022

Accumulated other comprehensive (loss) income

(9,887)

6,743

Treasury stock at cost, 1,487 shares as of December 31, 2021 and 2020

(14,648)

(14,648)

Total shareholders’ equity

300,728

328,713

Total liabilities and shareholders’ equity

$

793,052

$

789,404

Artivion, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

(In thousands)

Year Ended December 31,

2021

2020

2019

Net cash flows from operating activities:

Net (loss) income

$

(14,834)

$

(16,682)

$

1,720

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

Depreciation and amortization

23,977

20,712

18,317

Non-cash compensation

10,711

6,912

8,799

Change in fair value of contingent consideration

8,870

4,523

--

Non-cash lease expense

7,521

7,145

5,009

Write-down of inventories and deferred preservation costs

5,377

3,443

1,488

Write-off of Endospan Option

4,944

--

--

Non-cash interest expense

2,005

3,656

1,631

Change in fair value of long-term loan receivable

409

4,949

--

Deferred income taxes

(4,470)

4,283

(2,305)

Gain on sale of non-financial assets

(15,923)

--

--

Other

2,060

124

551

Changes in operating assets and liabilities:

Prepaid expenses and other assets

(1,404)

(2,720)

(6,177)

Accounts payable, accrued expenses, and other liabilities

(1,893)

(9,157)

251

Receivables

(11,560)

9,938

(5,332)

Inventories and deferred preservation costs

(18,375)

(24,757)

(8,125)

Net cash flows (used in) provided by operating activities

(2,585)

12,369

15,827

Net cash flows from investing activities:

Proceeds from sale of non-financial assets, net

19,000

--

--

Ascyrus Acquisition, net of cash acquired

--

(59,119)

--

Payments for Endospan agreement

--

(5,000)

(15,000)

Capital expenditures

(13,091)

(7,328)

(8,072)

Other

(249)

(1,681)

(871)

Net cash flows provided by (used in) investing activities

5,660

(73,128)

(23,943)

Net cash flows from financing activities:

Proceeds from exercise of stock options and issuance of common stock

3,756

2,432

4,758

Proceeds from issuance of convertible debt

--

100,000

--

Proceeds from revolving line of credit

--

30,000

--

Proceeds from financing insurance premiums

--

2,815

--

Repayment of revolving line of credit

--

(30,000)

--

Redemption and repurchase of stock to cover tax withholdings

(1,914)

(1,995)

(2,743)

Payment of debt issuance costs

(2,219)

(3,647)

--

Repayment of debt

(3,085)

(5,346)

(2,780)

Payment of contingent consideration

(8,200)

--

--

Other

(561)

(651)

(728)

Net cash flows (used in) provided by financing activities

(12,223)

93,608

(1,493)

Effect of exchange rate changes on cash, cash equivalents, and restricted securities

2,200

(5,185)

1,667

(Decrease) increase in cash, cash equivalents, and restricted securities

(6,948)

27,664

(7,942)

Cash, cash equivalents, and restricted securities, beginning of year

61,958

34,294

42,236

Cash, cash equivalents, and restricted securities, end of year

$

55,010

$

61,958

$

34,294

Artivion, Inc. and Subsidiaries

Financial Highlights

(In thousands)

(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2021

2020

2021

2020

Products:

Aortic stents and stent grafts

$

23,222

$

17,731

$

85,387

$

61,663

Surgical sealants

18,478

17,083

70,714

62,068

On-X

15,520

13,668

57,363

48,053

Other

1,849

2,020

8,133

7,515

Total products

59,069

50,502

221,597

179,299

Preservation services

20,325

17,394

77,239

73,928

Total revenues

$

79,394

$

67,896

$

298,836

$

253,227

Revenues:

U.S.

$

39,622

$

35,103

$

151,151

$

138,274

International

39,772

32,793

147,685

114,953

Total revenues

$

79,394

$

67,896

$

298,836

$

253,227

Artivion, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Revenues and General Administrative, and Marketing Expense

(In thousands, except per share data)

(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2021

2020

Growth
Rate

2021

2020

Growth
Rate

Reconciliation of total revenues, GAAP to

total revenues, non-GAAP:

Total revenues, GAAP

$

79,394

$

67,896

16.9%

$

298,836

$

253,227

18.0%

Including AMDS prior to acquisition

--

--

--

2,088

Excluding PerClot post sale

--

(801)

--

(1,299)

Impact of changes in currency exchange

--

(283)

--

4,088

Total proforma constant currency revenue, non-GAAP

$

79,394

$

66,812

18.8%

$

298,836

$

258,104

15.8%

(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2021

2020

2021

2020

Reconciliation of G&A expenses, GAAP to

adjusted G&A, non-GAAP:

General, administrative, and marketing expense,
GAAP

$

51,253

$

36,103

$

169,774

$

141,136

Operating business development, integration, and
severance expense

(10,012)

(4,839)

(16,150)

(7,371)

Adjusted G&A, non-GAAP:

$

41,241

$

31,264

$

153,624

$

133,765

Artivion, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Operating Income and Adjusted EBITDA

(In thousands, except per share data)

(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2021

2020

2021

2020

Reconciliation of operating (loss) income, GAAP to

adjusted operating income, non-GAAP:

Operating (loss) income

$

(9,339)

$

1,914

$

8,117

$

2,441

Gain from sale of non-financial assets

--

--

(15,923)

--

Amortization expense

4,119

4,334

16,820

13,764

Operating business development, integration, and
severance expense

10,012

4,839

16,150

7,371

Corporate rebranding expense

905

15

1,428

336

Adjusted operating income, non-GAAP

$

5,697

$

11,102

$

26,592

$

23,912

(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2021

2020

2021

2020

Reconciliation of net loss, GAAP to

adjusted EBITDA, non-GAAP:

Net loss, GAAP

$

(20,100)

$

(3,458)

$

(14,834)

$

(16,682)

Adjustments:

Depreciation and amortization expense

5,969

5,894

23,977

20,712

Interest expense

3,892

4,718

16,887

16,698

Business development, integration, and severance
expense

10,421

4,839

16,559

12,320

Stock-based compensation expense

3,240

(520)

10,711

6,912

Corporate rebranding expense

905

15

1,428

336

Interest income

(19)

(36)

(79)

(217)

Income tax expense (benefit)

4,013

3,366

7

(492)

Gain from sale of non-financial assets

--

--

(15,923)

--

Loss (income) on foreign currency revaluation

2,447

(2,688)

5,545

(1,829)

Adjusted EBITDA, non-GAAP

$

10,768

$

12,130

$

44,278

$

37,758

Artivion, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Net Loss and Diluted Loss Per Common Share

(In thousands, except per share data)

(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2021

2020

2021

2020

GAAP:

Loss before income taxes

$

(16,087)

$

(92)

$

(14,827)

$

(17,174)

Income tax expense (benefit)

4,013

3,366

7

(492)

Net loss

$

(20,100)

$

(3,458)

$

(14,834)

$

(16,682)

Diluted loss per common share

$

(0.51)

$

(0.09)

$

(0.38)

$

(0.44)

Diluted weighted-average common

shares outstanding

39,161

38,613

38,983

37,861

Reconciliation of loss before income taxes, GAAP

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

Loss before income taxes, GAAP

$

(16,087)

$

(92)

$

(14,827)

$

(17,174)

Adjustments:

Business development, integration, and severance expense

10,421

4,839

16,559

12,320

Amortization expense

4,119

4,334

16,820

13,764

Gain from sale of non-financial assets

--

--

(15,923)

--

Non-cash interest expense

454

1,395

2,479

3,656

Corporate rebranding expense

905

15

1,428

336

Adjusted (loss) income before income taxes,

non-GAAP

(188)

10,491

6,536

12,902

Income tax expense calculated at a pro forma tax rate of 25%

(47)

2,623

1,634

3,226

Adjusted (loss) income, non-GAAP

$

(141)

$

7,868

$

4,902

$

9,676

Reconciliation of diluted loss per common share, GAAP

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

Diluted (loss) income per common share, GAAP:

$

(0.51)

$

(0.09)

$

(0.38)

$

(0.44)

Adjustments:

Business development, integration, and severance expense

0.26

0.12

0.42

0.32

Amortization expense

0.10

0.11

0.43

0.36

Gain from sale of non-financial assets

--

--

(0.41)

--

Non-cash interest expense

0.01

0.04

0.06

0.09

Corporate rebranding expense

0.03

--

0.04

0.01

Effect of 25% pro forma tax rate

0.21

0.09

0.09

0.10

Tax effect of non-GAAP adjustments

(0.10)

(0.07)

(0.13)

(0.19)

Adjusted diluted (loss) income per common share,

non-GAAP:

$

(0.00)

$

0.20

$

0.12

$

0.25

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:

39,161

38,613

38,983

37,861

Adjustments:

Effect of dilutive stock options and awards

--

487

560

508

Effect of convertible senior notes

--

--

--

--

Diluted weighted-average common shares outstanding, non-
GAAP

39,161

39,100

39,543

38,369

Contacts:

Artivion

Gilmartin Group LLC

D. Ashley Lee

Brian Johnston / Lynn Lewis

Executive Vice President, Chief Financial Officer and

Phone: 332-895-3222

Chief Operating Officer

investors@artivion.com

Phone: 770-419-3355

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/artivion-reports-fourth-quarter-and-full-year-2021-financial-results-301485196.html

SOURCE Artivion, Inc.

Company Codes: NYSE:AORT

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