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CryoLife Reports Second Quarter 2021 Financial Results

July 29, 2021 at 4:05 PM EDT

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

investors@cryolife.com 

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
 and December 31, 2020, respectively


(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
AMDS


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
AMDS, non-GAAP

$

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
the Senior Convertible Notes












 

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SOURCE CryoLife, Inc.