ATLANTA, July 29, 2021 /PRNewswire/ --
Second Quarter and Recent Business Highlights:
- Achieved total revenues of $76.1 million in the second quarter 2021 versus $53.8 million in the second quarter of 2020, an increase of 42% on a GAAP basis and 35% on a non-GAAP proforma constant currency basis
- Net loss was ($2.2) million, or ($0.06) per share, in the second quarter of 2021
- Non-GAAP net income was $4.8 million, or $0.12 per share, in the second quarter of 2021
CryoLife, Inc. (NYSE:CRY), a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the second quarter ended June 30, 2021.
"For the second consecutive quarter we saw revenue growth on both a GAAP and pro forma constant currency basis compared to the prior year, and more importantly compared to 2019. Growth was driven by our new product launches outside of the U.S., a normalization in procedure volumes in the U.S., continued recovery in Europe, and strength in our U.S. On-X business," commented Pat Mackin, Chairman, President, and Chief Executive Officer.
"Additionally, we continued to advance our regulatory strategy and are on track to file PMAs for PerClot and PROACT Mitral in the third quarter. PROACT Mitral, if approved, is expected to drive growth in 2022 and 2023. We also made solid progress on enrollment in our PROACT Xa clinical trial while advancing R&D programs designed to fuel growth beginning in 2024."
Second Quarter 2021 Financial Results
Total revenues for the second quarter of 2021 were $76.1 million, reflecting an increase of 42% on a GAAP basis and 35% on a non-GAAP proforma constant currency basis, both compared to the second quarter of 2020.
Net loss for the second quarter of 2021 was ($2.2) million, or ($0.06) per fully diluted common share, compared to net loss of ($3.7) million, or ($0.10) per fully diluted common share for the second quarter of 2020. Non-GAAP net income for the second quarter of 2021 was $4.8 million, or $0.12 per fully diluted common share, compared to non-GAAP net loss of ($525,000), or ($0.01) per fully diluted common share for the second quarter of 2020.
The financial results reported in this earnings release are preliminary pending the Company's filing of its quarterly report on Form 10-Q, which it expects to file on July 30, 2021.
2021 Financial Outlook
The Company expects revenue in the second half of 2021 to increase 7% – 10% on a pro forma constant currency basis compared to the second half of 2019, which excludes PerClot, resulting in full year 2021 revenues of between $296.0 million and $300.0 million at a EUR/USD exchange rate of 1.20. Revenues for the third quarter of 2021 are expected to be between $71.0 million and $73.0 million. This forecast is based on our estimates of the current and anticipated impact of Covid-19 on our business and contemplates minimal contribution from PerClot in the second half of 2021 due to the sale of our PerClot product line and Baxter's assumption of distribution for SMI PerClot outside of the U.S.
The Company's financial performance for the remainder of 2021 and future periods 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, non-GAAP EBITDA, and non-GAAP adjusted operating income results exclude (as applicable) business development, integration, and severance expense; depreciation and amortization expense; interest income and expense; non-cash interest expense; gain 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, July 29, 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 August 5, 2021 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13721548.
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 forward-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 belief that PROACT Mitral should help drive our growth in 2022 and 2023; our expectation that the PROACT Xa clinical trial and advanced R&D programs will deliver additional growth opportunities for us beginning in 2024; our forecasted revenue growth of 7%-10% for the second half of 2021 compared to the second half of 2019 (on a pro forma constant currency basis), resulting in forecasted full year revenues of between $296.0 million and $300.0 million at a EUR/USD exchange rate of 1.20; our forecast of third quarter 2021 revenues of between $71.0 million and $73.0 million; and our estimates of the current and anticipated impact of COVID-19 on our business for the second half of 2021. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations, including that the benefits anticipated from the Ascyrus Medical LLC transaction and Endospan distribution agreement may not be achieved, that our product candidates may not receive regulatory approval, that our products that obtain regulatory approval may not be accepted by the market, and the continued effects of COVID-19, including 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, 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.
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 | |
Phone: 770-419-3355 |
CryoLife, Inc. and Subsidiaries Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (In thousands, except per share data) (Unaudited)
| |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Revenues: | |||||||||||
Products | $ | 56,076 | $ | 37,268 | $ | 109,421 | $ | 83,688 | |||
Preservation services | 20,072 | 16,503 | 37,814 | 36,512 | |||||||
Total revenues | 76,148 | 53,771 | 147,235 | 120,200 | |||||||
Cost of products and preservation services: | |||||||||||
Products | 16,178 | 10,040 | 31,089 | 23,080 | |||||||
Preservation services | 9,457 | 7,841 | 17,795 | 17,059 | |||||||
Total cost of products and preservation services | 25,635 | 17,881 | 48,884 | 40,139 | |||||||
Gross margin | 50,513 | 35,890 | 98,351 | 80,061 | |||||||
Operating expenses: | |||||||||||
General, administrative, and marketing | 40,830 | 32,288 | 79,468 | 71,290 | |||||||
Research and development | 8,360 | 5,522 | 16,114 | 11,878 | |||||||
Total operating expenses | 49,190 | 37,810 | 95,582 | 83,168 | |||||||
Operating income (loss) | 1,323 | (1,920) | 2,769 | (3,107) | |||||||
Interest expense | 4,855 | 3,652 | 8,895 | 7,040 | |||||||
Interest income | (18) | (66) | (42) | (168) | |||||||
Other (income) expense, net | (1,331) | (740) | 600 | 2,922 | |||||||
Loss before income taxes | (2,183) | (4,766) | (6,684) | (12,901) | |||||||
Income tax benefit | (5) | (1,077) | (1,368) | (2,547) | |||||||
Net loss | $ | (2,178) | $ | (3,689) | $ | (5,316) | $ | (10,354) | |||
Loss per common share: | |||||||||||
Basic | $ | (0.06) | $ | (0.10) | $ | (0.14) | $ | (0.27) | |||
Diluted | $ | (0.06) | $ | (0.10) | $ | (0.14) | $ | (0.27) | |||
Weighted-average common shares outstanding: | |||||||||||
Basic | 38,943 | 37,520 | 38,841 | 37,455 | |||||||
Diluted | 38,943 | 37,520 | 38,841 | 37,455 | |||||||
Net loss | $ | (2,178) | $ | (3,689) | $ | (5,316) | $ | (10,354) | |||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | 2,973 | 4,434 | (7,317) | (29) | |||||||
Comprehensive income (loss) | $ | 795 | $ | 745 | $ | (12,633) | $ | (10,383) | |||
CryoLife, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands)
| |||||
June 30, | December 31, | ||||
2021 | 2020 | ||||
(Unaudited) | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 50,473 | $ | 61,412 | |
Restricted securities | 554 | 546 | |||
Trade receivables, net | 49,672 | 45,964 | |||
Other receivables | 3,612 | 2,788 | |||
Inventories, net | 76,362 | 73,038 | |||
Deferred preservation costs | 41,276 | 36,546 | |||
Prepaid expenses and other | 16,105 | 14,295 | |||
Total current assets | 238,054 | 234,589 | |||
Goodwill | 255,484 | 260,061 | |||
Acquired technology, net | 177,023 | 186,091 | |||
Operating lease right-of-use assets, net | 48,359 | 18,571 | |||
Other intangibles, net | 38,817 | 40,966 | |||
Property and equipment, net | 36,417 | 33,077 | |||
Deferred income taxes | 1,681 | 1,446 | |||
Other assets | 14,662 | 14,603 | |||
Total assets | $ | 810,497 | $ | 789,404 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Current portion of contingent consideration | $ | 17,300 | $ | 16,430 | |
Accounts payable | 10,773 | 9,623 | |||
Accrued compensation | 9,808 | 10,192 | |||
Accrued expenses | 7,625 | 7,472 | |||
Accrued procurement fees | 4,013 | 3,619 | |||
Taxes payable | 3,338 | 2,808 | |||
Current maturities of operating leases | 2,473 | 5,763 | |||
Current portion of long-term debt | 1,652 | 1,195 | |||
Other liabilities | 1,962 | 3,366 | |||
Total current liabilities | 58,944 | 60,468 | |||
Long-term debt | 308,050 | 290,468 | |||
Non-current maturities of operating leases | 47,440 | 14,034 | |||
Contingent consideration | 46,900 | 43,500 | |||
Deferred income taxes | 29,583 | 34,713 | |||
Deferred compensation liability | 5,503 | 5,518 | |||
Other liabilities | 12,242 | 11,990 | |||
Total liabilities | $ | 508,662 | $ | 460,691 | |
Commitments and contingencies | |||||
Shareholders' equity: | |||||
Preferred stock | -- | -- | |||
Common stock (issued shares of 40,742 in 2021 and 40,394 in 2020) | 407 | 404 | |||
Additional paid-in capital | 305,157 | 316,192 | |||
Retained earnings | 11,493 | 20,022 | |||
Accumulated other comprehensive (loss) income | (574) | 6,743 | |||
Treasury stock, at cost, 1,487 shares as of June 30, 2021 | (14,648) | (14,648) | |||
Total shareholders' equity | 301,835 | 328,713 | |||
Total liabilities and shareholders' equity | $ | 810,497 | $ | 789,404 | |
CryoLife, Inc. and Subsidiaries Condensed Consolidated Statement of Cash Flows (In thousands) (Unaudited)
| |||||
Six Months Ended | |||||
June 30, | |||||
2021 | 2020 | ||||
Net cash flows from operating activities: | |||||
Net loss | $ | (5,316) | $ | (10,354) | |
Adjustments to reconcile net loss to net cash from operating activities: | |||||
Depreciation and amortization | 11,999 | 9,642 | |||
Non-cash compensation | 4,595 | 5,074 | |||
Change in fair value of contingent consideration | 4,270 | -- | |||
Non-cash lease expense | 3,575 | 3,518 | |||
Write-down of inventories and deferred preservation costs | 2,988 | 1,217 | |||
Deferred income taxes | (4,269) | (1,894) | |||
Other | 2,174 | 859 | |||
Changes in operating assets and liabilities: | |||||
Accounts payable, accrued expenses, and other liabilities | (1,166) | (142) | |||
Prepaid expenses and other assets | (2,076) | (3,422) | |||
Receivables | (5,454) | 7,644 | |||
Inventories and deferred preservation costs | (11,712) | (12,902) | |||
Net cash flows used in operating activities | (392) | (760) | |||
Net cash flows from investing activities: | |||||
Capital expenditures | (7,249) | (3,776) | |||
Other | 205 | (705) | |||
Net cash flows used in investing activities | (7,044) | (4,481) | |||
Net cash flows from financing activities: | |||||
Proceeds from exercise of stock options and issuance of common stock | 2,321 | 1,175 | |||
Proceeds from issuance of convertible debt | -- | 100,000 | |||
Proceeds from revolving line of credit | -- | 30,000 | |||
Proceeds from financing insurance premiums | -- | 2,816 | |||
Repayment of revolving line of credit | -- | (30,000) | |||
Payment of debt issuance costs | (2,219) | (3,647) | |||
Redemption and repurchase of stock to cover tax withholdings | (1,831) | (1,728) | |||
Repayment of term loan | (1,405) | (1,389) | |||
Other | (603) | (1,041) | |||
Net cash flows (used in) provided by financing activities | (3,737) | 96,186 | |||
Effect of exchange rate changes on cash, cash equivalents, and restricted securities | 242 | 879 | |||
(Decrease) increase in cash, cash equivalents, and restricted securities | (10,931) | 91,824 | |||
Cash, cash equivalents, and restricted securities beginning of period | 61,958 | 34,294 | |||
Cash, cash equivalents, and restricted securities end of period | $ | 51,027 | $ | 126,118 | |
CryoLife, Inc. and Subsidiaries Financial Highlights (In thousands)
| |||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Products: | |||||||||||
Aortic stents and stent grafts | $ | 21,064 | $ | 13,174 | $ | 41,269 | $ | 28,642 | |||
Surgical sealants | 17,864 | 12,437 | 35,692 | 29,174 | |||||||
On-X | 14,726 | 10,116 | 27,821 | 22,318 | |||||||
Other | 2,422 | 1,541 | 4,639 | 3,554 | |||||||
Total products | 56,076 | 37,268 | 109,421 | 83,688 | |||||||
Preservation services | 20,072 | 16,503 | 37,814 | 36,512 | |||||||
Total revenues | $ | 76,148 | $ | 53,771 | $ | 147,235 | $ | 120,200 | |||
Revenues: | |||||||||||
U.S. | $ | 39,006 | $ | 30,392 | $ | 75,324 | $ | 66,839 | |||
International | 37,142 | 23,379 | 71,911 | 53,361 | |||||||
Total revenues | $ | 76,148 | $ | 53,771 | $ | 147,235 | $ | 120,200 | |||
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 | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2021 | 2020 | Growth Rate | 2021 | 2020 | Growth Rate | ||||||||
Reconciliation of total revenues, GAAP to | |||||||||||||
total revenues, non-GAAP: | |||||||||||||
Total revenues, GAAP | $ | 76,148 | $ | 53,771 | 42% | $ | 147,235 | $ | 120,200 | 22% | |||
Including AMDS prior to acquisition | -- | 699 | -- | 1,397 | |||||||||
Total GAAP revenues including | 76,148 | 54,470 | 40% | 147,235 | 121,597 | 21% | |||||||
Impact of changes in currency exchange | -- | 1,810 | -- | 3,534 | |||||||||
Total constant currency revenues including | $ | 76,148 | $ | 56,280 | 35% | $ | 147,235 | $ | 125,131 | 18% | |||
(Unaudited) | (Unaudited) | |||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Reconciliation of operating income (loss), GAAP to | ||||||||||||
adjusted operating income, non-GAAP: | ||||||||||||
Operating income (loss) | $ | 1,323 | $ | (1,920) | $ | 2,769 | $ | (3,107) | ||||
Amortization expense | 4,238 | 3,000 | 8,498 | 6,033 | ||||||||
Business development, integration, and severance expense | 3,359 | 653 | 4,829 | 1,476 | ||||||||
Corporate rebranding expense | 47 | -- | 62 | 321 | ||||||||
Adjusted operating income, non-GAAP | $ | 8,967 | $ | 1,733 | $ | 16,158 | $ | 4,723 | ||||
(Unaudited) | (Unaudited) | |||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Reconciliation of net loss, GAAP to | ||||||||||||
adjusted EBITDA, non-GAAP: | ||||||||||||
Net loss, GAAP | $ | (2,178) | $ | (3,689) | $ | (5,316) | $ | (10,354) | ||||
Adjustments: | ||||||||||||
Depreciation and amortization expense | 5,993 | 4,743 | 11,999 | 9,642 | ||||||||
Interest expense | 4,855 | 3,652 | 8,895 | 7,040 | ||||||||
Business development, integration, and severance expense | 3,359 | 653 | 4,829 | 1,476 | ||||||||
Stock-based compensation expense | 2,115 | 2,510 | 4,595 | 5,074 | ||||||||
Corporate rebranding expense | 47 | -- | 62 | 321 | ||||||||
Income tax benefit | (5) | (1,077) | (1,368) | (2,547) | ||||||||
Interest income | (18) | (66) | (42) | (168) | ||||||||
(Gain) loss on foreign currency revaluation | (1,364) | (744) | 522 | 2,919 | ||||||||
Adjusted EBITDA, non-GAAP | $ | 12,804 | $ | 5,982 | $ | 24,176 | $ | 13,403 | ||||
CryoLife, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Net Income (Loss) and Diluted Income (Loss) Per Common Share (In thousands, except per share data)
| |||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
GAAP: | |||||||||||
Loss before income taxes | $ | (2,183) | $ | (4,766) | $ | (6,684) | $ | (12,901) | |||
Income tax benefit | (5) | (1,077) | (1,368) | (2,547) | |||||||
Net loss | $ | (2,178) | $ | (3,689) | $ | (5,316) | $ | (10,354) | |||
Diluted loss per common share: | $ | (0.06) | $ | (0.10) | $ | (0.14) | $ | (0.27) | |||
Diluted weighted-average common shares outstanding | 38,943 | 37,520 | 38,841 | 37,455 | |||||||
Reconciliation of loss before income taxes, | |||||||||||
GAAP to adjusted income (loss), non-GAAP | |||||||||||
Loss before income taxes, GAAP: | $ | (2,183) | $ | (4,766) | $ | (6,684) | $ | (12,901) | |||
Adjustments: | |||||||||||
Amortization expense | 4,238 | 3,000 | 8,498 | 6,033 | |||||||
Business development, integration, and severance expense | 3,359 | 653 | 4,829 | 1,476 | |||||||
Non-cash interest expense | 1,004 | 413 | 1,572 | 818 | |||||||
Corporate rebranding expense | 47 | -- | 62 | 321 | |||||||
Adjusted income (loss) before income taxes, | |||||||||||
non-GAAP | 6,465 | (700) | 8,277 | (4,253) | |||||||
Income tax expense (benefit) calculated at a | |||||||||||
pro forma tax rate of 25% | 1,616 | (175) | 2,069 | (1,063) | |||||||
Adjusted net income (loss), non-GAAP | $ | 4,849 | $ | (525) | $ | 6,208 | $ | (3,190) | |||
Reconciliation of diluted loss per common share, GAAP | |||||||||||
to adjusted diluted loss per common share, non-GAAP: | |||||||||||
Diluted loss per common share, GAAP: | $ | (0.06) | $ | (0.10) | $ | (0.14) | $ | (0.27) | |||
Adjustments: | |||||||||||
Amortization expense | 0.11 | 0.09 | 0.22 | 0.16 | |||||||
Business development, integration, and severance expense | 0.08 | 0.02 | 0.12 | 0.04 | |||||||
Non-cash interest expense | 0.03 | 0.01 | 0.04 | 0.02 | |||||||
Corporate rebranding expense | -- | -- | -- | 0.01 | |||||||
Tax effect of non-GAAP adjustments | (0.05) | (0.03) | (0.09) | (0.06) | |||||||
Effect of 25% pro forma tax rate | 0.01 | -- | 0.01 | 0.02 | |||||||
Adjusted diluted income (loss) per common share, | |||||||||||
non-GAAP | $ | 0.12 | $ | (0.01) | $ | 0.16 | $ | (0.08) | |||
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: | 38,943 | 37,520 | 38,841 | 37,455 | |||||||
Adjustments: | |||||||||||
Stock options | 325 | -- | 326 | -- | |||||||
Contingently returnable shares | 229 | -- | 273 | -- | |||||||
Diluted weighted-average common shares outstanding, non-GAAP1 | 39,497 | 37,520 | 39,440 | 37,455 | |||||||
1- Diluted weighted-average common shares outstanding, non-GAAP does not include the dilutive impact of | |||||||||||
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SOURCE CryoLife, Inc.