Home >  Investors Relations >  CryoLife Reports Fourth Quarter & Full Year 2019 Financial Results

CryoLife Reports Third Quarter 2020 Financial Results

November 4, 2020 at 4:05 PM EST

ATLANTA, Nov. 4, 2020 /PRNewswire/ --

Third Quarter and Recent Business Highlights:

  • Achieved total revenues of $65.1 million in the third quarter 2020 versus $67.9 million in the third quarter of 2019
    • Total revenues decreased 4% on a GAAP and non-GAAP constant currency basis versus third quarter 2019
    • Excluding TMR, third quarter revenues decreased 2% on a GAAP and non-GAAP constant currency basis versus third quarter 2019
  • Achieved net loss of ($2.9) million, or ($0.08) per share
  • Achieved non-GAAP net income of $4.9 million, or $0.13 per share
  • Completed acquisition of Ascyrus Medical LLC

CryoLife, Inc. (NYSE: CRY), a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the third quarter ended September 30, 2020

"Our performance in the third quarter further validated our belief that the majority of products in our portfolio are used in procedures that cannot be postponed or delayed for long.  We believe our business is weathering the pandemic well and we continue to progress on our strategic initiatives," commented Pat Mackin, Chairman, President, and Chief Executive Officer.  "We saw an improvement in procedure volumes sequentially month to month from July to September 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.  Lastly, we completed the acquisition of Ascyrus Medical LLC, further strengthening our innovative portfolio of products focused on aortic repair and increasing our total addressable market opportunity to over $6 billion, providing us adequate opportunity to drive our financial performance for years to come.  Given these achievements in the third quarter, we remain optimistic that we will deliver on our growth strategy and remain in a position of strength through 2021."

Third Quarter Financial Results
Total revenues for the third quarter of 2020 were $65.1 million, reflecting a decrease of (4%) on a GAAP and non-GAAP constant currency basis, both compared to the third quarter of 2019.  Revenue performance across all product lines reflected the impact of the COVID-19 pandemic on the number of procedures using our products.

Net loss for the third quarter of 2020 was ($2.9) million, or ($0.08) per fully diluted common share, compared to net loss of ($134,000), or less than $0.01 per fully diluted common share for the third quarter of 2019.  Non-GAAP net income for the third quarter of 2020 was $4.9 million, or $0.13 per fully diluted common share, compared to non-GAAP net income of $2.5 million, or $0.07 per fully diluted common share for the third quarter of 2019. 

2020 Financial Outlook
Due to continued uncertainties resulting from the COVID-19 pandemic, the Company is not issuing 2020 financial guidance at this time.

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, integration, and severance expense, amortization expense, non-cash interest 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, November 4, 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 November 11, 2020 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The Conference ID for the replay is 13712302.

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 the majority of products in our portfolio are used in procedures that cannot be postponed or delayed for long; our business is weathering the pandemic well; we continue to progress on our strategic initiatives; certain of our products will deliver revenue in 2021 and 2022; and, with the  acquisition of Ascyrus Medical LLC, our portfolio of products focused on aortic repair is strengthened, increases our total addressable market opportunity to over $6 billion, and will provide us adequate opportunity to drive our financial performance for years to come. They also include that we remain optimistic that we will deliver on our growth strategy and remain in a position of strength through 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 may not be achieved and 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


Nine Months Ended


September 30,


September 30,



2020



2019



2020



2019


(Unaudited)


(Unaudited)

Revenues:












Products

$

45,109


$

47,484


$

128,797


$

147,053

Preservation services


20,022



20,397



56,534



59,472

Total revenues


65,131



67,881



185,331



206,525













Cost of products and preservation services:












Products


12,998



12,706



36,078



41,021

Preservation services


9,001



9,953



26,060



29,043

Total cost of products and preservation services


21,999



22,659



62,138



70,064













Gross margin


43,132



45,222



123,193



136,461













Operating expenses:












General, administrative, and marketing


33,743



34,259



105,033



105,402

Research and development


5,755



6,259



17,633



17,648

Total operating expenses


39,498



40,518



122,666



123,050













Operating income


3,634



4,704



527



13,411













Interest expense


4,940



3,555



11,980



11,260

Interest income


(13)



(259)



(181)



(608)

Other expense, net


2,888



2,400



5,810



2,662













(Loss) income before income taxes


(4,181)



(992)



(17,082)



97

Income tax benefit


(1,311)



(858)



(3,858)



(2,304)













Net (loss) income

$

(2,870)


$

(134)


$

(13,224)


$

2,401













(Loss) income per common share:












Basic

$

(0.08)


$

(0.00)


$

(0.35)


$

0.06

Diluted

$

(0.08)


$

(0.00)


$

(0.35)


$

0.06













Weighted-average common shares outstanding:












Basic


37,912



37,255



37,608



37,065

Diluted


37,912



37,255



37,608



37,850













Net (loss) income

$

(2,870)


$

(134)


$

(13,224)


$

2,401

Other comprehensive income (loss):












Foreign currency translation adjustments


8,698



(8,017)



8,669



(8,803)

Comprehensive income (loss)

$

5,828


$

(8,151)


$

(4,555)


$

(6,402)

 

CryoLife, Inc. and Subsidiaries

Financial Highlights

 (In thousands)



(Unaudited)


(Unaudited)


Three Months Ended


Nine Months Ended


September 30,


September 30,


2020


2019


2020


2019

Products:












BioGlue

$

15,811


$

15,679


$

44,985


$

50,834

JOTEC


15,290



15,774



43,932



48,936

On-X


12,067



12,610



34,385



36,751

PhotoFix


1,134



1,087



3,056



2,752

PerClot


724



980



2,081



2,814

CardioGenesis cardiac laser therapy


83



1,354



358



4,966

          Total products


45,109



47,484



128,797



147,053













Preservation services:












Cardiac tissue

$

10,679


$

11,304



28,758



30,734

Vascular tissue


9,285



9,093



27,657



28,738

NeoPatch


58



--



119



--

Total preservation services


20,022



20,397



56,534



59,472













Total revenues

$

65,131


$

67,881


$

185,331


$

206,525













Revenues:








U.S.

$

36,332


$

37,981


$

103,171


$

113,548

International


28,799



29,900



82,160



92,977

Total revenues

$

65,131


$

67,881


$

185,331


$

206,525

 








(Unaudited)





September 30,


December 31,


2020


2019

Cash, cash equivalents, and restricted securities

$

64,635


$

34,294

Total current assets


233,699



187,390

Total assets


782,200



605,654

Total current liabilities


53,667



45,195

Total liabilities


456,434



319,958

Shareholders' equity


325,766



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


Nine Months Ended


September 30,


September 30,



2020



2019



2020



2019

GAAP:












(Loss) income before income taxes

$

(4,181)


$

(992)


$

(17,082)


$

97

Income tax benefit


(1,311)



(858)



(3,858)



(2,304)

Net (loss) income

$

(2,870)


$

(134)


$

(13,224)


$

2,401













Diluted (loss) income per common share

$

(0.08)


$

(0.00)


$

(0.35)


$

0.06













Diluted weighted-average common shares outstanding


37,912



37,255



37,608



37,850













Reconciliation of (loss) income before income taxes, GAAP to adjusted net  income, non-GAAP












(Loss) income before income taxes, GAAP:

$

(4,181)


$

(992)


$

(17,082)


$

97

Adjustments:












Amortization expense


3,397



2,660



9,430



7,796

Business development, integration, and severance expense


6,005



1,250



7,481



2,562

Non-cash interest expense


1,371



407



2,261



1,225

Corporate rebranding expense


--



--



321



--













Adjusted income before income taxes, non-GAAP


6,592



3,325



2,411



11,680

























Income tax benefit calculated at a












pro forma tax rate of 25%


1,648



831



603



2,920

Adjusted net  income, non-GAAP

$

4,944


$

2,494


$

1,808


$

8,760













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












Diluted (loss) income per common share, GAAP:

$

(0.08)


$

(0.00)


$

(0.35)


$

0.06

Adjustments:












Amortization expense


0.09



0.07



0.25



0.20

Business development, integration, and severance expense


0.16



0.03



0.20



0.06

Non-cash interest expense


0.04



0.01



0.06



0.03

Corporate rebranding expense


--



--



0.01



--

Tax effect of non-GAAP adjustments


(0.07)



(0.02)



(0.13)



(0.06)

Effect of 25% pro forma tax rate


(0.01)



(0.02)



0.01



(0.06)

Adjusted diluted income per common share, non-GAAP

$

0.13


$

0.07


$

0.05


$

0.23













Diluted weighted-average common shares outstanding


38,357



37,940



38,151



37,850

 

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


Nine Months Ended


September 30,


September 30,


2020


2019

Growth
Rate


2020


2019

Growth
Rate

Reconciliation of total revenues, GAAP to total revenues, non-GAAP:














Total revenues, GAAP

$

65,131


$

67,881

-4%


$

185,331


$

206,525

-10%

Impact of changes in currency exchange


--



4




--



(1,719)


Total constant currency revenues, non-GAAP

$

65,131


$

67,885

-4%


$

185,331


$

204,806

-10%















Reconciliation of total revenues, GAAP to total revenues, non-GAAP:














Total revenues, GAAP

$

65,131


$

67,881

-4%


$

185,331


$

206,525

-10%

Less CardioGenesis cardiac laser therapy


(83)



(1,354)




(358)



(4,966)


Total GAAP revenues excluding CardioGenesis


65,048



66,527

-2%



184,973



201,559

-8%

Impact of changes in currency exchange


--



4




--



(1,719)


Total constant currency revenues excluding CardioGenesis, non-GAAP

$

65,048


$

66,531

-2%


$

184,973


$

199,840

-7%















 















(Unaudited)



(Unaudited)


Three Months Ended



Nine Months Ended


September 30,



September 30,


2020


2019



2020


2019

Reconciliation of net (loss) income, GAAP to adjusted EBITDA, non-GAAP:













Net (loss) income, GAAP

$

(2,870)


$

(134)



$

(13,224)


$

2,401

Adjustments:













Depreciation and amortization expense


5,176



4,526




14,818



13,257

Interest expense


4,940



3,555




11,980



11,260

Business development, integration, and severance expense


6,005



1,250




7,481



2,562

Stock-based compensation expense


2,358



2,462




7,432



6,581

(Income) loss on foreign currency revaluation


(2,073)



2,419




846



2,669

Corporate rebranding expense


--



--




321



--

Income tax benefit


(1,311)



(858)




(3,858)



(2,304)

Interest income


(13)



(259)




(181)



(608)

Adjusted EBITDA, non-GAAP

$

12,212


$

12,961



$

25,615


$

35,818

 

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.