Home >  Investors Relations >  CryoLife, Inc. Receives ''CE'' Mark For International Distribution Of New BioGlue Delivery System

CryoLife Reports First Quarter 2020 Financial Results

April 30, 2020 at 4:05 PM EDT

ATLANTA, April 30, 2020 /PRNewswire/ --

First Quarter and Recent Business Highlights:

  • Achieved total revenues of $66.4 million in the first quarter 2020 versus preliminary first quarter 2020 revenues of $65.5 million
    • Total revenues decreased 2% and decreased 1% on a constant currency basis versus first quarter 2019
    • Excluding TMR, total revenues increased 1% and increased 2% on a constant currency basis versus first quarter of 2019
  • Received CE Mark for our Frozen Elephant Trunk E-vita OPEN NEO
  • Received renewed CE Mark status for our AAP Ascending Aortic Prosthesis
  • Secured Credit Facility Covenant Modification to Enhance Liquidity

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

"During these challenging times, we are focused on protecting our employees' health and safety while continuing to supply our customers and patients who depend on our life saving and life sustaining products," commented Pat Mackin, Chairman, President, and Chief Executive Officer.  "Our business is well suited to weather the impact of this global pandemic given the nature of the procedures in which our products are used.  Our manufacturing facilities have been running at near capacity and our supply chain remained largely intact.  We have continued to fund R&D programs related to products that could deliver revenue in 2021 and 2022, including our U.S. PerClot PMA, BioGlue China and PROACT Mitral.  Further, we renegotiated our Credit Facility covenant to have greater financial flexibility, if necessary.  Given our recent device approvals, and the ongoing progress made on our key growth initiatives, we expect 2021 to be a strong year for CryoLife."

First Quarter 2020 Financial Results
Total revenues for the first quarter of 2020 were $66.4 million, reflecting a decrease of (2%), and (1%) on a non-GAAP constant currency basis, both compared to the first quarter of 2019.  Growth in tissue processing and On-X revenues was offset by decreases in BioGlue and JOTEC revenues. 

Net loss for the first quarter of 2020 was ($6.7) million, or ($0.18) per fully diluted common share, compared to a net loss of ($297,000), or ($0.01) per fully diluted common share for the first quarter of 2019.  Non-GAAP net loss for the first quarter of 2020 was ($3.0) million, or ($0.08) per fully diluted common share, compared to non-GAAP net income of $1.5 million, or $0.04 per fully diluted common share for the first quarter of 2019.  Net loss on both a GAAP and non-GAAP basis reflects a $3.7 million pretax loss primarily related to non-cash unrealized foreign currency losses on intercompany payable balances.

2020 Financial Outlook
As previously reported on April 1, 2020, the Company has withdrawn its 2020 financial guidance due to uncertainties resulting from the COVID-19 pandemic.

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 expenses, amortization expense, inventory basis step-up expense, loss on foreign currency revaluation, stock-based compensation expense, and corporate rebranding expenses.  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, April 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 May 7, 2020 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The Conference ID for the replay is 13702193.

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 is well suited to weather the impact of  the COVID-19 pandemic given the nature of the procedures in which our products are used; that we are funding R&D programs for products that could deliver revenue in 2021 and 2022, including our U.S. PerClot PMA, BioGlue China, and PROACT Mitral; that the renegotiation of our Credit Facility covenant will give us greater financial flexibility, if necessary; and that we expect 2021 to be a strong year for CryoLife.  These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations.  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)








Three Months Ended


March 31,



2020



2019

Revenues:






Products

$

46,420


$

48,401

Preservation services


20,009



19,104

Total revenues


66,429



67,505







Cost of products and preservation services:






Products


13,040



13,826

Preservation services


9,218



9,406

Total cost of products and preservation services


22,258



23,232







Gross margin


44,171



44,273







Operating expenses:






General, administrative, and marketing


39,002



36,520

Research and development


6,356



5,548

Total operating expenses


45,358



42,068







Operating (loss) income


(1,187)



2,205







Interest expense


3,388



3,894

Interest income


(102)



(116)

Other expense, net


3,662



77







Loss before income taxes


(8,135)



(1,650)

Income tax benefit


(1,470)



(1,353)







Net loss

$

(6,665)


$

(297)







Loss per common share:






Basic

$

(0.18)


$

(0.01)

Diluted

$

(0.18)


$

(0.01)







Weighted-average common shares outstanding:






Basic


37,390



36,778

Diluted


37,390



36,778







Net loss

$

(6,665)


$

(297)

Other comprehensive loss:






Foreign currency translation adjustments


(4,463)



(3,781)

Comprehensive loss

$

(11,128)


$

(4,078)







 

CryoLife, Inc. and Subsidiaries
Financial Highlights
(In thousands)








(Unaudited)


Three Months Ended


March 31,


2020


2019

Products:






BioGlue

$

16,737


$

17,222

JOTEC


15,268



15,954

On-X


12,202



11,731

PhotoFix


1,042



730

PerClot


860



1,050

NEXUS


200



--

CardioGenesis cardiac laser therapy


111



1,714

          Total products


46,420



48,401







Preservation services:






Cardiac tissue

$

10,033


$

8,930

Vascular tissue


9,976



10,174

Total preservation services


20,009



19,104







Total revenues

$

66,429


$

67,505







Revenues:






U.S.

$

36,447


$

37,325

International


29,982



30,180

Total revenues

$

66,429


$

67,505

 








(Unaudited)





March 31,


December 31,


2020


2019

Cash, cash equivalents, and restricted securities

$

63,877


$

34,294

Total current assets


214,082



187,390

Total assets


621,033



605,654

Total current liabilities


43,685



45,195

Total liabilities


344,424



319,958

Shareholders' equity


276,609



285,696

 

CryoLife, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Net Loss and Diluted (Loss) Income Per Common Share
(In thousands, except per share data)








(Unaudited)


Three Months Ended


March 31,



2020



2019

GAAP:






Loss before income taxes

$

(8,135)


$

(1,650)

Income tax benefit


(1,470)



(1,353)

Net loss

$

(6,665)


$

(297)







Diluted loss per common share:

$

(0.18)


$

(0.01)







Reconciliation of loss before income taxes,






GAAP to adjusted net (loss) income, non-GAAP






Loss before income taxes, GAAP

$

(8,135)


$

(1,650)

Adjustments:






Amortization expense


3,033



2,579

Business development and integration expenses


823



1,109

Corporate rebranding


321



--

Adjusted (loss) income before income taxes,






non-GAAP


(3,958)



2,038

Income tax expense calculated at a






pro forma tax rate of 25%


(989)



510

Adjusted net (loss) income, non-GAAP

$

(2,969)


$

1,528







Reconciliation of diluted loss per common share, GAAP






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






Diluted loss per common share, GAAP:

$

(0.18)


$

(0.01)

Adjustments:






Amortization expense


0.08



0.07

Business development and integration expenses


0.02



0.03

Corporate rebranding


0.01



--

Tax effect of non-GAAP adjustments


(0.03)



(0.03)

Effect of 25% pro forma tax rate


0.02



(0.02)

Adjusted diluted (loss) income per common share,






 non-GAAP:

$

(0.08)


$

0.04







Diluted weighted-average common






shares outstanding


37,390



37,711

 

CryoLife, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Revenues
(In thousands, except per share data)









(Unaudited)


Three Months Ended


March 31,


2020


2019

Growth
Rate

Reconciliation of total revenues, GAAP to







total revenues, non-GAAP:







Total revenues, GAAP

$

66,429


$

67,505

-2%

Impact of changes in currency exchange


--



(629)


Total constant currency revenues, non-GAAP

$

66,429


$

66,876

-1%








Reconciliation of total revenues, GAAP to







total revenues, non-GAAP:







Total revenues, GAAP

$

66,429


$

67,505

-2%

Less CardioGenesis cardiac laser therapy


(111)



(1,714)


Total GAAP revenues excluding
CardioGenesis


66,318



65,791

1%

Impact of changes in currency exchange


--



(629)


Total constant currency revenues excluding
CardioGenesis, non-GAAP

$

66,318


$

65,162

2%








Reconciliation of total BioGlue revenues, GAAP to







total BioGlue revenues, non-GAAP:







Total BioGlue revenues, GAAP

$

16,737


$

17,222

-3%

Impact of changes in currency exchange


--



(76)


Total constant currency BioGlue revenues, non-GAAP

$

16,737


$

17,146

-2%








Reconciliation of total On-X revenues, GAAP to







total On-X revenues, non-GAAP:







Total On-X revenues, GAAP

$

12,202


$

11,731

4%

Impact of changes in currency exchange


--



(17)


Total constant currency On-X revenues, non-GAAP

$

12,202


$

11,714

4%








Reconciliation of total JOTEC revenues, GAAP, to







total JOTEC revenues, non-GAAP:







Total JOTEC revenues, GAAP

$

15,268


$

15,954

-4%

Impact of changes in currency exchange


--



(534)


Total constant currency JOTEC revenues, non-GAAP

$

15,268


$

15,420

-1%

 

 

CryoLife, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Adjusted EBITDA
(In thousands, except per share data)








(Unaudited)


Three Months Ended


March 31,


2020


2019

Reconciliation of net loss, GAAP to






adjusted EBITDA, non-GAAP:






Net loss, GAAP

$

(6,665)


$

(297)

Adjustments:






Depreciation and amortization expense


4,898



4,350

Loss on foreign currency revaluation


3,663



74

Interest expense


3,388



3,894

Stock-based compensation expense


2,564



1,853

Business development and integration expenses


823



1,109

Corporate rebranding


321



--

Interest income


(102)



(116)

Income tax benefit


(1,470)



(1,353)

Adjusted EBITDA, non-GAAP

$

7,420


$

9,514

 

 

Contacts:




CryoLife

D. Ashley Lee

Executive Vice President, Chief Financial Officer and Chief

Operating Officer

Phone: 770-419-3355

Gilmartin Group LLC

Greg Chodaczek / Lynn Lewis

Phone:  347-620-7010

investors@cryolife.com

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SOURCE CryoLife, Inc.