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CryoLife Reports Second Quarter 2019 Financial Results

July 30, 2019 at 4:05 PM EDT

ATLANTA, July 30, 2019 /PRNewswire/ -- 

Cryolife logo. (PRNewsFoto/CryoLife, Inc.) (PRNewsFoto/CRYOLIFE_ INC_) (PRNewsFoto/CRYOLIFE, INC.)

Second Quarter and Recent Business Highlights:

  • Total revenues were $71.1 million in the second quarter of 2019, reflecting year over year growth of 4% and a 7% increase on a non-GAAP constant currency basis, both compared to the second quarter of 2018
    • BioGlue® revenues increased 5%, and 7% on a non-GAAP constant currency basis, both compared to the second quarter of 2018
    • On-X® revenues increased 4%, and 5% on a non-GAAP constant currency basis, both compared to the second quarter of 2018
    • JOTEC® revenues were flat, and increased 8% on a non-GAAP constant currency basis, both compared to the second quarter of 2018
  • Net income was $2.8 million, or $0.07 per fully diluted common share; non-GAAP net income was $4.1 million, or $0.11 per fully diluted common share

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, 2019. 

"Our second quarter performance marked another period of consistent growth despite headwinds.  We also continued to make important progress advancing our clinical pipeline and R&D programs" said Pat Mackin, Chairman, President, and Chief Executive Officer.  "We expect the second half of 2019 to commence the start of a multi-year launch of next generation products into existing and new geographies.  This is an exciting time in our history and we are confident we have the right mix of differentiated products supported by our experienced sales organization to take the Company to higher levels of revenue performance."

Second Quarter 2019 Financial
Total revenues for the second quarter of 2019 were $71.1 million, reflecting growth of 4%, and 7% on a non-GAAP constant currency basis, both compared to the second quarter of 2018.  The non-GAAP increase was driven by revenue growth from BioGlue, On-X, JOTEC, and tissue processing. 

Net income for the second quarter of 2019 was $2.8 million, or $0.07 per fully diluted common share, compared to a net income of $226,000, or $0.01 per fully diluted common share for the second quarter of 2018.  Non-GAAP net income for the second quarter of 2019 was $4.1 million, or $0.11 per fully diluted common share, compared to non-GAAP net income of $3.9 million, or $0.10 per fully diluted common share for the second quarter of 2018. 

2019 Financial Outlook
CryoLife is reiterating its full-year financial guidance, with total revenues for 2019 expected to be in the range of $280 million to $284 million and non-GAAP earnings per share expected to be between $0.28 and $0.32

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 guidance for 2019 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, and stock-based compensation 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, 2019 at 4:30 p.m. EDT 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 7, 2019 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The Conference ID for the replay is 13692463.

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 belief that we expect the second half of 2019 to commence the start of a multi-year launch of next generation products into existing and new geographies and we have the right mix of differentiated products supported by our experienced sales organization to take the Company to higher levels of revenue performance.  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, 2018.  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,


2019


2018



2019



2018

Revenues:












Products

$

51,168


$

49,313


$

99,569


$

92,911

Preservation services


19,971



19,183



39,075



37,533

Total revenues


71,139



68,496



138,644



130,444













Cost of products and preservation services:












Products


14,489



13,550



28,315



27,707

Preservation services


9,684



9,095



19,090



17,658

Total cost of products and preservation services


24,173



22,645



47,405



45,365













Gross margin


46,966



45,851



91,239



85,079













Operating expenses:












General, administrative, and marketing


34,623



34,727



71,143



72,075

Research and development


5,841



5,719



11,389



11,089

Total operating expenses


40,464



40,446



82,532



83,164

Operating income


6,502



5,405



8,707



1,915













Interest expense


3,811



4,103



7,705



7,759

Interest income


(233)



(30)



(349)



(89)

Other expense, net


185



1,466



262



1,285













Income (loss) before income taxes


2,739



(134)



1,089



(7,040)

Income tax benefit


(93)



(360)



(1,446)



(3,411)













Net income (loss)

$

2,832


$

226


$

2,535


$

(3,629)













Income (loss) per common share:












Basic

$

0.08


$

0.01


$

0.07


$

(0.10)

Diluted

$

0.07


$

0.01


$

0.07


$

(0.10)













Weighted-average common shares outstanding:












Basic


37,156



36,318



36,968



36,233

Diluted


37,838



37,249



37,789



36,233

 

 

 

CRYOLIFE, INC. AND SUBSIDIARIES

Financial Highlights

(In thousands)














(Unaudited)


(Unaudited)


Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2018



2019



2018

Products:












BioGlue

$

17,933


$

17,069


$

35,155


$

33,039

JOTEC


17,208



17,205



33,162



31,665

On-X


12,410



11,888



24,141



22,197

CardioGenesis cardiac laser therapy


1,898



1,578



3,612



2,924

PerClot


784



968



1,834



1,940

PhotoFix


935



605



1,665



1,146

          Total products


51,168



49,313



99,569



92,911













Preservation services:












Cardiac tissue


10,500



9,055



19,430



17,158

Vascular tissue


9,471



10,128



19,645



20,375

Total preservation services


19,971



19,183



39,075



37,533













Total revenues

$

71,139


$

68,496


$

138,644


$

130,444













Revenues:












   U.S.

$

38,239


$

36,719


$

75,563


$

71,607

International


32,900



31,777



63,081



58,837

Total revenues

$

71,139


$

68,496


$

138,644


$

130,444

 

 




















(Unaudited)










June 30,


December 31,








2019


2018













Cash, cash equivalents, and restricted securities







$

40,255


$

42,236

Total current assets








188,557



179,168

Total assets








597,123



571,091

Total current liabilities








37,468



34,523

Total liabilities








314,970



296,024

Shareholders' equity








282,153



275,067

 

 

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,


2019


2018


2019


2018

GAAP:












Income (loss) before income taxes

$

2,739


$

(134)


$

1,089


$

(7,040)

Income tax benefit


(93)



(360)



(1,446)



(3,411)

Net income (loss)

$

2,832


$

226


$

2,535


$

(3,629)













Diluted income (loss) per common share:

$

0.07


$

0.01


$

0.07


$

(0.10)













Reconciliation of income (loss) before income












taxes, GAAP to adjusted net income,












      non-GAAP:












Income (loss) before income taxes, GAAP

$

2,739


$

(134)


$

1,089


$

(7,040)

Adjustments:












Business development and integration expenses


203



1,294



1,312



5,016

Amortization expense


2,557



2,753



5,136



5,488

Inventory basis step-up expense


--



1,237



--



2,743

Adjusted income before income taxes,












non-GAAP


5,499



5,150



7,537



6,207

Income tax expense calculated at a












pro forma tax rate of 25%


1,375



1,288



1,884



1,552

Adjusted net income, non-GAAP

$

4,124


$

3,862


$

5,653


$

4,655













Reconciliation of diluted income (loss) per












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












Diluted income (loss) per common share, GAAP:

$

0.07


$

0.01


$

0.07


$

(0.10)

Adjustments:












Business development and integration expenses


--



0.03



0.03



0.13

Amortization expense


0.06



0.07



0.13



0.14

Inventory basis step-up expense


--



0.03



--



0.07

Tax effect of non-GAAP adjustments


--



(0.03)



(0.03)



(0.08)

Effect of 25% pro forma tax rate


(0.02)



(0.01)



(0.05)



(0.04)

Adjusted diluted income per common share,












 non-GAAP:

$

0.11


$

0.10


$

0.15


$

0.12













Diluted weighted-average common












shares outstanding


37,838



37,249



37,789



37,152

 

 

CRYOLIFE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP

Revenues

(In thousands, except per share data)

















(Unaudited)


(Unaudited)


Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2018

Growth Rate


2019


2018

Growth Rate

Reconciliation of total revenues, GAAP to














total revenues, non-GAAP:














Total revenues, GAAP

$

71,139


$

68,496

4%


$

138,644


$

130,444

6%

Impact of changes in currency exchange


--



(1,738)




--



(3,074)


Total constant currency revenues, non-GAAP

$

71,139


$

66,758

7%


$

138,644


$

127,370

9%















Reconciliation of total BioGlue revenues, GAAP to














total BioGlue revenues, non-GAAP:














Total BioGlue revenues, GAAP

$

17,933


$

17,069

5%


$

35,155


$

33,039

6%

Impact of changes in currency exchange


--



(295)




--



(517)


Total constant currency BioGlue revenues, non-GAAP

$

17,933


$

16,774

7%


$

35,155


$

32,522

8%















Reconciliation of total On-X revenues, GAAP to














total On-X revenues, non-GAAP:














Total On-X revenues, GAAP

$

12,410


$

11,888

4%


$

24,141


$

22,197

9%

Impact of changes in currency exchange


--



(91)




--



(168)


Total constant currency On-X revenues, non-GAAP

$

12,410


$

11,797

5%


$

24,141


$

22,029

10%















Reconciliation of total JOTEC revenues, GAAP, to














total JOTEC revenues, non-GAAP:














Total JOTEC revenues, GAAP

$

17,208


$

17,205

0%


$

33,162


$

31,665

5%

Impact of changes in currency exchange


--



(1,299)




--



(2,284)


Total constant currency JOTEC revenues, non-GAAP

$

17,208


$

15,906

8%


$

33,162


$

29,381

13%

 

 

CRYOLIFE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP

Adjusted EBITDA

(In thousands, except per share data)
















(Unaudited)



(Unaudited)


Three Months Ended



Six Months Ended


June 30,



June 30,


2019


2018



2019


2018

Reconciliation of net income (loss), GAAP













to adjusted EBITDA, non-GAAP:













Net income (loss), GAAP

$

2,832


$

226



$

2,535


$

(3,629)

Adjustments:













Depreciation and amortization expense


4,381



4,730




8,731



9,106

Income tax benefit


(93)



(360)




(1,446)



(3,411)

Interest income


(233)



(30)




(349)



(89)

Interest expense


3,811



4,103




7,705



7,759

Inventory basis step-up expense


--



1,237




--



2,743

Business development and integration expenses


203



1,294




1,312



5,016

Loss on foreign currency revaluation


176



1,477




250



1,458

Stock-based compensation expense


2,266



1,872




4,119



3,120

Adjusted EBITDA, non-GAAP

$

13,343


$

14,549



$

22,857


$

22,073














 

 

Contacts:




CryoLife

Gilmartin Group LLC

D. Ashley Lee   

Greg Chodaczek / Lynn Lewis

Executive Vice President, Chief Financial Officer and

Phone:  646-924-1769

Chief Operating Officer

investors@cryolife.com

Phone: 770-419-3355


 

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SOURCE CryoLife, Inc.