ATLANTA, July 30, 2020 /PRNewswire/ --
Second Quarter and Recent Business Highlights:
- Achieved total revenues of $53.8
million in the second quarter 2020 versus $71.1 million in the second quarter of 2019
- Total revenues decreased 24% and decreased 23% on a non-GAAP
constant currency basis versus second quarter 2019
- Completed $100.0 million
convertible debt financing for general corporate purposes,
including the repayment of approximately $30.0 million outstanding under the
revolving credit facility
- Initiated enrollment in PROACT Xa clinical trial
- Initiated limited market release of E-vita Open NEO and E-nside
and limited relaunch of NEXUS™
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, 2020.
"Despite the disruptions to our business from COVID-19, we
posted a solid second quarter and advanced on several of our key
initiatives. We believe our business is weathering the
pandemic well, as we believe the majority of products in our
portfolio are used in procedures that cannot be postponed or
delayed for long," commented Pat
Mackin, Chairman, President, and Chief Executive
Officer. "We saw an improvement in procedure volumes
sequentially month to month from April to June with a corresponding
increase in revenue growth over those months. Our
manufacturing facilities continue to run at near capacity and our
supply chain remains largely intact. We have continued to
fund R&D programs related to products that we believe will
deliver revenue in 2021 and 2022, including our regulatory
approvals for U.S. PerClot PMA, BioGlue China and PROACT
Mitral. We initiated limited market releases for Evita Open
NEO and E-nside, with E-nya anticipated to follow by October, and a
limited relaunch of NEXUS. We also initiated enrollment in
our PROACT Xa clinical trial. Lastly, we completed a
$100.0 million convertible debt
financing to use for general corporate purposes, including the
repayment of our $30.0 million
revolver draw down. We have the financial strength to be
opportunistic on the business development front. Given these
achievements in the second quarter, we anticipate continued
momentum in the second half of 2020 and are optimistic that we will
have a strong 2021."
Second Quarter Financial Results
Total revenues for
the second quarter of 2020 were $53.8
million, reflecting a decrease of (24%), and (23%) on a
non-GAAP constant currency basis, both compared to the second
quarter of 2019. Decreases in all product lines reflect the
impact of the COVID-19 pandemic on the number of procedures using
our products.
Net loss for the second quarter of 2020 was ($3.7) million, or ($0.10) per fully diluted common share, compared
to net income of $2.8 million, or
$0.07 per fully diluted common share
for the second quarter of 2019. Non-GAAP net loss for the
second quarter of 2020 was ($835,000), or ($0.02) per fully diluted common share, compared
to non-GAAP net income of $4.1
million, or $0.11 per fully
diluted common share for the second quarter of 2019.
2020 Financial Outlook
Due to uncertainties resulting from the COVID-19 pandemic, the
Company is not issuing 2020 financial guidance at this time.
All numbers are presented on a GAAP basis except where expressly
referenced as non-GAAP. The Company does not provide GAAP
income per common share on a forward-looking basis because the
Company is unable to predict with reasonable certainty business
development and acquisition-related expenses, purchase accounting
fair value adjustments, and any unusual gains and losses without
unreasonable effort. These items are uncertain, depend on
various factors, and could be material to results computed in
accordance with GAAP.
The Company's financial performance for 2020 is subject to the
risks identified below.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures.
Investors should consider this non-GAAP information in addition to,
and not as a substitute for, financial measures prepared in
accordance with U.S. GAAP. In addition, this non-GAAP
financial information may not be the same as similar measures
presented by other companies. The Company's non-GAAP net
income and non-GAAP EBITDA results exclude (as applicable) business
development and integration expense, severance expense,
amortization expense, inventory basis step-up expense, loss on
foreign currency revaluation, stock-based compensation expense, and
corporate rebranding expense. The Company believes that these
non-GAAP presentations provide useful information to investors
regarding unusual non-operating transactions; the operating expense
structure of the Company's existing and recently acquired
operations, without regard to its on-going efforts to acquire
additional complementary products and businesses and the
transaction and integration expenses incurred in connection with
recently acquired and divested product lines; and the operating
expense structure excluding fluctuations resulting from foreign
currency revaluation and stock-based compensation expense.
The Company believes it is useful to exclude certain expenses
because such amounts in any specific period may not directly
correlate to the underlying performance of its business operations
or can vary significantly between periods as a result of factors
such as acquisitions, or non-cash expense related to amortization
of previously acquired tangible and intangible assets. The
Company has excluded the impact of changes in currency exchange
from certain revenues to evaluate growth rates on a constant
currency basis. The Company does, however, expect to incur
similar types of expenses and currency exchange impacts in the
future, and this non-GAAP financial information should not be
viewed as a statement or indication that these types of expenses
will not recur.
Webcast and Conference Call Information
The Company
will hold a teleconference call and live webcast later today,
July 30, 2020 at 4:30 p.m. ET to discuss the results followed by a
question and answer session. To listen to the live
teleconference, please dial 201-689-8261. A replay of the
teleconference will be available through August 6, 2020 and can be accessed by calling
(toll free) 877-660-6853 or 201-612-7415. The Conference ID
for the replay is 13706961.
The live webcast and replay can be accessed by going to the
Investor Relations section of the CryoLife website at
www.cryolife.com and selecting the heading Webcasts &
Presentations.
About CryoLife, Inc.
Headquartered in suburban
Atlanta, Georgia, CryoLife is a
leader in the manufacturing, processing, and distribution of
medical devices and implantable tissues used in cardiac and
vascular surgical procedures focused on aortic repair.
CryoLife markets and sells products in more than 100 countries
worldwide. For additional information about CryoLife, visit
our website, www.cryolife.com.
Forward Looking Statements
Statements made in this
press release that look forward in time or that
express management's beliefs, expectations, or hopes are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such
forward-looking statements reflect the views of management at the
time such statements are made. These statements include our
beliefs that our business us weathering the pandemic well; our
belief that the majority of products in our portfolio are used in
procedures that cannot be postponed or delayed for long; that we
are continuing to fund R&D programs for products that will
deliver revenue in 2021 and 2022, including our regulatory
approvals for U.S. PerClot PMA, BioGlue China and PROACT Mitral; we
will relaunch E-nya on a limited basis by October, 2020; we have
the financial strength to be opportunistic on the business
development front; and we will have continued momentum in the
second half of 2020 and a strong 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 the continued
effects of COVID-19 and government mandates implemented to address
the pandemic. These risks and uncertainties include the risk
factors detailed in our Securities and Exchange Commission filings,
including our Form 10-K for year ended December 31, 2019. CryoLife does not
undertake to update its forward-looking statements, whether as a
result of new information, future events, or otherwise.
CryoLife, Inc. and
Subsidiaries
Financial
Highlights
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
$
|
37,268
|
|
$
|
51,168
|
|
$
|
83,688
|
|
$
|
99,569
|
Preservation
services
|
|
16,503
|
|
|
19,971
|
|
|
36,512
|
|
|
39,075
|
Total
revenues
|
|
53,771
|
|
|
71,139
|
|
|
120,200
|
|
|
138,644
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
and preservation services:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
10,040
|
|
|
14,489
|
|
|
23,080
|
|
|
28,315
|
Preservation
services
|
|
7,841
|
|
|
9,684
|
|
|
17,059
|
|
|
19,090
|
Total cost of
products and preservation services
|
|
17,881
|
|
|
24,173
|
|
|
40,139
|
|
|
47,405
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
35,890
|
|
|
46,966
|
|
|
80,061
|
|
|
91,239
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
General,
administrative, and marketing
|
|
32,288
|
|
|
34,623
|
|
|
71,290
|
|
|
71,143
|
Research and
development
|
|
5,522
|
|
|
5,841
|
|
|
11,878
|
|
|
11,389
|
Total operating
expenses
|
|
37,810
|
|
|
40,464
|
|
|
83,168
|
|
|
82,532
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
(1,920)
|
|
|
6,502
|
|
|
(3,107)
|
|
|
8,707
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
3,652
|
|
|
3,811
|
|
|
7,040
|
|
|
7,705
|
Interest
income
|
|
(66)
|
|
|
(233)
|
|
|
(168)
|
|
|
(349)
|
Other (income)
expense, net
|
|
(740)
|
|
|
185
|
|
|
2,922
|
|
|
262
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes
|
|
(4,766)
|
|
|
2,739
|
|
|
(12,901)
|
|
|
1,089
|
Income tax
benefit
|
|
(1,077)
|
|
|
(93)
|
|
|
(2,547)
|
|
|
(1,446)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(3,689)
|
|
$
|
2,832
|
|
$
|
(10,354)
|
|
$
|
2,535
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.10)
|
|
$
|
0.08
|
|
$
|
(0.27)
|
|
$
|
0.07
|
Diluted
|
$
|
(0.10)
|
|
$
|
0.07
|
|
$
|
(0.27)
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
37,520
|
|
|
37,156
|
|
|
37,455
|
|
|
36,968
|
Diluted
|
|
37,520
|
|
|
37,838
|
|
|
37,455
|
|
|
37,789
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(3,689)
|
|
$
|
2,832
|
|
$
|
(10,354)
|
|
$
|
2,535
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
4,434
|
|
|
2,995
|
|
|
(29)
|
|
|
(786)
|
Comprehensive
income (loss)
|
$
|
745
|
|
$
|
5,827
|
|
$
|
(10,383)
|
|
$
|
1,749
|
CryoLife, Inc. and
Subsidiaries
Financial
Highlights
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Products:
|
|
|
|
|
|
|
|
|
|
|
|
BioGlue
|
$
|
12,437
|
|
$
|
17,933
|
|
$
|
29,174
|
|
$
|
35,155
|
JOTEC
|
|
13,174
|
|
|
17,208
|
|
|
28,642
|
|
|
33,162
|
On-X
|
|
10,116
|
|
|
12,410
|
|
|
22,318
|
|
|
24,141
|
PhotoFix
|
|
880
|
|
|
935
|
|
|
1,922
|
|
|
1,665
|
PerClot
|
|
497
|
|
|
784
|
|
|
1,357
|
|
|
1,834
|
CardioGenesis cardiac
laser therapy
|
|
164
|
|
|
1,898
|
|
|
275
|
|
|
3,612
|
Total products
|
|
37,268
|
|
|
51,168
|
|
|
83,688
|
|
|
99,569
|
|
|
|
|
|
|
|
|
|
|
|
|
Preservation
services:
|
|
|
|
|
|
|
|
|
|
|
|
Cardiac
tissue
|
$
|
8,061
|
|
$
|
10,500
|
|
|
18,079
|
|
|
19,430
|
Vascular
tissue
|
|
8,396
|
|
|
9,471
|
|
|
18,372
|
|
|
19,645
|
NeoPatch
|
|
46
|
|
|
--
|
|
|
61
|
|
|
--
|
Total preservation
services
|
|
16,503
|
|
|
19,971
|
|
|
36,512
|
|
|
39,075
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
53,771
|
|
$
|
71,139
|
|
$
|
120,200
|
|
$
|
138,644
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
U.S.
|
$
|
30,392
|
|
$
|
38,239
|
|
$
|
66,839
|
|
$
|
75,563
|
International
|
|
23,379
|
|
|
32,900
|
|
|
53,361
|
|
|
63,081
|
Total
revenues
|
$
|
53,771
|
|
$
|
71,139
|
|
$
|
120,200
|
|
$
|
138,644
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2020
|
|
2019
|
Cash, cash
equivalents, and restricted securities
|
$
|
126,118
|
|
$
|
34,294
|
Total current
assets
|
|
287,121
|
|
|
187,390
|
Total
assets
|
|
693,254
|
|
|
605,654
|
Total current
liabilities
|
|
48,933
|
|
|
45,195
|
Total
liabilities
|
|
396,698
|
|
|
319,958
|
Shareholders'
equity
|
|
296,556
|
|
|
285,696
|
CryoLife, Inc. and
Subsidiaries
Reconciliation of
GAAP to Non-GAAP
Net (Loss) Income
and Diluted (Loss) Income Per Common Share
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes
|
$
|
(4,766)
|
|
$
|
2,739
|
|
$
|
(12,901)
|
|
$
|
1,089
|
Income tax
benefit
|
|
(1,077)
|
|
|
(93)
|
|
|
(2,547)
|
|
|
(1,446)
|
Net (loss)
income
|
$
|
(3,689)
|
|
$
|
2,832
|
|
$
|
(10,354)
|
|
$
|
2,535
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
income per common share
|
$
|
(0.10)
|
|
$
|
0.07
|
|
$
|
(0.27)
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of (loss) income before income taxes,
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to adjusted
net (loss) income, non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes, GAAP:
|
$
|
(4,766)
|
|
$
|
2,739
|
|
$
|
(12,901)
|
|
$
|
1,089
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
expense
|
|
3,000
|
|
|
2,557
|
|
|
6,033
|
|
|
5,136
|
Business development,
integration, and severance expense
|
|
653
|
|
|
203
|
|
|
1,476
|
|
|
1,312
|
Corporate rebranding
expense
|
|
--
|
|
|
--
|
|
|
321
|
|
|
--
|
Adjusted (loss)
income before income taxes,
|
|
|
|
|
|
|
|
|
|
|
|
non-GAAP
|
|
(1,113)
|
|
|
5,499
|
|
|
(5,071)
|
|
|
7,537
|
Income tax (benefit)
expense calculated at a
|
|
|
|
|
|
|
|
|
|
|
|
pro forma tax rate of
25%
|
|
(278)
|
|
|
1,375
|
|
|
(1,268)
|
|
|
1,884
|
Adjusted net (loss)
income, non-GAAP
|
$
|
(835)
|
|
$
|
4,124
|
|
$
|
(3,803)
|
|
$
|
5,653
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of diluted (loss) income per common share, GAAP
|
|
|
|
|
|
|
|
|
|
|
|
to adjusted
diluted (loss) income per common share,
non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
income per common share, GAAP:
|
$
|
(0.10)
|
|
$
|
0.07
|
|
$
|
(0.27)
|
|
$
|
0.07
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
expense
|
|
0.08
|
|
|
0.06
|
|
|
0.16
|
|
|
0.13
|
Business development,
integration, and severance expense
|
|
0.02
|
|
|
--
|
|
|
0.04
|
|
|
0.03
|
Corporate rebranding
expense
|
|
--
|
|
|
--
|
|
|
0.01
|
|
|
--
|
Tax effect of non-GAAP
adjustments
|
|
(0.02)
|
|
|
--
|
|
|
(0.05)
|
|
|
(0.03)
|
Effect of 25% pro forma
tax rate
|
|
--
|
|
|
(0.02)
|
|
|
0.01
|
|
|
(0.05)
|
Adjusted diluted
(loss) income per common share,
|
|
|
|
|
|
|
|
|
|
|
|
non-GAAP
|
$
|
(0.02)
|
|
$
|
0.11
|
|
$
|
(0.10)
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average common
|
|
|
|
|
|
|
|
|
|
|
|
shares
outstanding
|
|
37,520
|
|
|
37,838
|
|
|
37,455
|
|
|
37,789
|
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,
|
|
2020
|
|
2019
|
Growth
Rate
|
|
2020
|
|
2019
|
Growth
Rate
|
Reconciliation
of total revenues, GAAP to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total revenues,
non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues,
GAAP
|
$
|
53,771
|
|
$
|
71,139
|
-24%
|
|
$
|
120,200
|
|
$
|
138,644
|
-13%
|
Impact of changes in
currency exchange
|
|
--
|
|
|
(1,095)
|
|
|
|
--
|
|
|
(1,723)
|
|
Total constant
currency revenues, non-GAAP
|
$
|
53,771
|
|
$
|
70,044
|
-23%
|
|
$
|
120,200
|
|
$
|
136,921
|
-12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
June
30,
|
|
|
June
30,
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
Reconciliation
of net (loss) income, GAAP to
|
|
|
|
|
|
|
|
|
|
|
|
|
adjusted EBITDA,
non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income,
GAAP
|
$
|
(3,689)
|
|
$
|
2,832
|
|
|
$
|
(10,354)
|
|
$
|
2,535
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
4,743
|
|
|
4,381
|
|
|
|
9,642
|
|
|
8,731
|
Interest
expense
|
|
3,652
|
|
|
3,811
|
|
|
|
7,040
|
|
|
7,705
|
Stock-based
compensation expense
|
|
2,510
|
|
|
2,266
|
|
|
|
5,074
|
|
|
4,119
|
Business development,
integration, and severance expense
|
|
653
|
|
|
203
|
|
|
|
1,476
|
|
|
1,312
|
Corporate rebranding
expense
|
|
--
|
|
|
--
|
|
|
|
321
|
|
|
--
|
Interest
income
|
|
(66)
|
|
|
(233)
|
|
|
|
(168)
|
|
|
(349)
|
(Income) loss on foreign
currency revaluation
|
|
(744)
|
|
|
176
|
|
|
|
2,919
|
|
|
250
|
Income tax
benefit
|
|
(1,077)
|
|
|
(93)
|
|
|
|
(2,547)
|
|
|
(1,446)
|
Adjusted EBITDA,
non-GAAP
|
$
|
5,982
|
|
$
|
13,343
|
|
|
$
|
13,403
|
|
$
|
22,857
|
Contacts:
|
|
|
CryoLife
D. Ashley
Lee
Executive Vice
President, Chief Financial Officer and
Chief Operating
Officer
Phone:
770-419-3355
|
Gilmartin Group
LLC
Brian Johnston / Lynn
Lewis
Phone:
631-807-1986
investors@cryolife.com
|
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SOURCE CryoLife, Inc.