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| Delaware | 1-13165 | 59-2417093 | ||||||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.)
|
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1655 Roberts Boulevard, N.W., Kennesaw, Georgia |
30144 | |||||||
| (Address of principal executive office) | (Zip Code) | |||||||
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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| Common Stock, $0.01 par value | AORT | NYSE | ||||||
| Exhibit Number | Description | ||||
99.1* |
Press Release dated May 6, 2024. |
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| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||
| ARTIVION, INC. | ||||||||
| By: | /s/ Lance A. Berry | |||||||
| Name: | Lance A. Berry | |||||||
| Title: |
Chief Financial Officer, and
Executive Vice President, Finance
|
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| Artivion | Gilmartin Group LLC | ||||
| Lance A. Berry | Brian Johnston / Laine Morgan | ||||
| Executive Vice President & | Phone: 332-895-3222 | ||||
| Chief Financial Officer | investors@artivion.com | ||||
| Phone: 770-419-3355 | |||||
| Three Months Ended March 31, |
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| 2024 | 2023 | ||||||||||
| Revenues: | |||||||||||
| Products | $ | 71,114 | $ | 62,291 | |||||||
| Preservation services | 26,317 | 20,938 | |||||||||
| Total revenues | 97,431 | 83,229 | |||||||||
| Cost of products and preservation services: | |||||||||||
| Products | 23,750 | 19,533 | |||||||||
| Preservation services | 10,735 | 9,969 | |||||||||
| Total cost of products and preservation services | 34,485 | 29,502 | |||||||||
| Gross margin | 62,946 | 53,727 | |||||||||
| Operating expenses: | |||||||||||
| General, administrative, and marketing | 30,689 | 50,365 | |||||||||
| Research and development | 6,946 | 7,223 | |||||||||
| Total operating expenses | 37,635 | 57,588 | |||||||||
| Operating income (loss) | 25,311 | (3,861) | |||||||||
| Interest expense | 7,826 | 6,096 | |||||||||
| Interest income | (374) | (75) | |||||||||
| Loss on extinguishment of debt | 3,669 | — | |||||||||
| Other expense (income), net | 1,409 | (963) | |||||||||
| Income (loss) before income taxes | 12,781 | (8,919) | |||||||||
| Income tax expense | 5,248 | 4,613 | |||||||||
| Net income (loss) | $ | 7,533 | $ | (13,532) | |||||||
| Income (loss) per share: | |||||||||||
| Basic | $ | 0.18 | $ | (0.33) | |||||||
| Diluted | $ | 0.18 | $ | (0.33) | |||||||
| Weighted-average common shares outstanding: | |||||||||||
| Basic | 41,290 | 40,432 | |||||||||
| Diluted | 47,886 | 40,432 | |||||||||
| Net income (loss) | $ | 7,533 | $ | (13,532) | |||||||
| Other comprehensive (loss) income: | |||||||||||
| Foreign currency translation adjustments | (3,137) | 4,621 | |||||||||
| Unrealized gain (loss) from foreign currency intra-entity loans, net of tax | 1,609 | (1,005) | |||||||||
| Comprehensive income (loss) | $ | 6,005 | $ | (9,916) | |||||||
| March 31, 2024 |
December 31, 2023 |
||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 51,118 | $ | 58,940 | |||||||
| Trade receivables, net | 74,301 | 71,796 | |||||||||
| Other receivables | 2,272 | 2,342 | |||||||||
| Inventories, net | 81,716 | 81,976 | |||||||||
| Deferred preservation costs, net | 50,151 | 49,804 | |||||||||
| Prepaid expenses and other | 17,227 | 15,810 | |||||||||
| Total current assets | 276,785 | 280,668 | |||||||||
| Goodwill | 245,030 | 247,337 | |||||||||
| Acquired technology, net | 138,474 | 142,593 | |||||||||
| Operating lease right-of-use assets, net | 42,492 | 43,822 | |||||||||
| Property and equipment, net | 37,788 | 38,358 | |||||||||
| Other intangibles, net | 29,506 | 29,638 | |||||||||
| Deferred income taxes | 668 | 1,087 | |||||||||
| Other long-term assets | 13,264 | 8,894 | |||||||||
| Total assets | $ | 784,007 | $ | 792,397 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 10,378 | $ | 13,318 | |||||||
| Accrued compensation | 10,843 | 18,715 | |||||||||
| Accrued expenses | 15,926 | 12,732 | |||||||||
| Taxes payable | 2,090 | 3,840 | |||||||||
| Current maturities of operating leases | 3,214 | 3,395 | |||||||||
| Accrued procurement fees | 1,418 | 1,439 | |||||||||
| Current portion of long-term debt | 270 | 1,451 | |||||||||
| Other current liabilities | 1,691 | 2,972 | |||||||||
| Total current liabilities | 45,830 | 57,862 | |||||||||
| Long-term debt | 313,004 | 305,531 | |||||||||
| Contingent consideration | 46,420 | 63,890 | |||||||||
| Non-current maturities of operating leases | 42,861 | 43,977 | |||||||||
| Deferred income taxes | 22,343 | 21,851 | |||||||||
| Deferred compensation liability | 7,445 | 6,760 | |||||||||
| Non-current finance lease obligation | 3,268 | 3,405 | |||||||||
| Other long-term liabilities | 7,851 | 7,341 | |||||||||
| Total liabilities | $ | 489,022 | $ | 510,617 | |||||||
| Commitments and contingencies | |||||||||||
| Shareholders’ equity: | |||||||||||
| Preferred stock | — | — | |||||||||
| Common stock (75,000 shares authorized, 43,224 and 42,569 shares issued in 2024 and 2023, respectively) | 432 | 426 | |||||||||
| Additional paid-in capital | 363,113 | 355,919 | |||||||||
| Retained deficit | (40,374) | (47,907) | |||||||||
| Accumulated other comprehensive loss | (13,538) | (12,010) | |||||||||
| Treasury stock, at cost, 1,487 shares as of March 31, 2024 and December 31, 2023 | (14,648) | (14,648) | |||||||||
| Total shareholders’ equity | 294,985 | 281,780 | |||||||||
| Total liabilities and shareholders’ equity | $ | 784,007 | $ | 792,397 | |||||||
| Three Months Ended March 31, |
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| 2024 | 2023 | ||||||||||
| Net cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 7,533 | $ | (13,532) | |||||||
| Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||||||
| Depreciation and amortization | 5,909 | 5,734 | |||||||||
| Deferred income taxes | 4,299 | (2,167) | |||||||||
| Loss on extinguishment of debt | 3,669 | — | |||||||||
| Non-cash compensation | 3,478 | 3,341 | |||||||||
| Non-cash lease expense | 1,920 | 1,802 | |||||||||
| Write-down of inventories and deferred preservation costs | 723 | 1,123 | |||||||||
| Change in fair value of contingent consideration | (17,470) | 4,800 | |||||||||
| Other | 644 | 754 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Inventories and deferred preservation costs | (1,380) | (3,222) | |||||||||
| Prepaid expenses and other assets | (2,268) | (2,014) | |||||||||
| Receivables | (3,334) | 3,540 | |||||||||
| Accounts payable, accrued expenses, and other liabilities | (9,216) | (6,313) | |||||||||
| Net cash flows used in operating activities | (5,493) | (6,154) | |||||||||
| Net cash flows from investing activities: | |||||||||||
| Capital expenditures | (3,611) | (2,843) | |||||||||
| Net cash flows used in investing activities | (3,611) | (2,843) | |||||||||
| Net cash flows from financing activities: | |||||||||||
| Proceeds from issuance of debt | 190,000 | — | |||||||||
| Proceeds from revolving credit facility | 30,000 | — | |||||||||
| Proceeds from exercise of stock options and issuance of common stock | 3,528 | 2,581 | |||||||||
| Principal payments on short-term notes payable | (1,027) | — | |||||||||
| Payment of debt issuance costs | (9,998) | — | |||||||||
| Repayment of debt | (211,627) | (690) | |||||||||
| Other | (139) | (720) | |||||||||
| Net cash flows provided by financing activities | 737 | 1,171 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 545 | (752) | |||||||||
| Decrease in cash and cash equivalents | (7,822) | (8,578) | |||||||||
| Cash and cash equivalents beginning of period | 58,940 | 39,351 | |||||||||
| Cash and cash equivalents end of period | $ | 51,118 | $ | 30,773 | |||||||
| Three Months Ended March 31, |
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| 2024 | 2023 | ||||||||||
| Products: | |||||||||||
| Aortic stent grafts | $ | 32,103 | $ | 26,150 | |||||||
| On-X | 19,681 | 17,656 | |||||||||
| Surgical sealants | 16,981 | 16,703 | |||||||||
| Other | 2,349 | 1,782 | |||||||||
| Total products | 71,114 | 62,291 | |||||||||
| Preservation services | 26,317 | 20,938 | |||||||||
| Total revenues | $ | 97,431 | $ | 83,229 | |||||||
| North America | 50,928 | 43,244 | |||||||||
| Europe, the Middle East, and Africa | 33,588 | 27,929 | |||||||||
| Asia Pacific | 7,609 | 7,878 | |||||||||
| Latin America | 5,306 | 4,178 | |||||||||
| Total revenues | $ | 97,431 | $ | 83,229 | |||||||
| Revenues for the Three Months Ended March 31, |
Percent Change From Prior Year |
||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||
| US GAAP | US GAAP | Exchange Rate Effect | Constant Currency | Constant Currency | |||||||||||||||||||||||||
| Products: | |||||||||||||||||||||||||||||
| Aortic stent grafts | $ | 32,103 | $ | 26,150 | $ | 748 | $ | 26,898 | 19% | ||||||||||||||||||||
| On-X | 19,681 | 17,656 | 104 | 17,760 | 11% | ||||||||||||||||||||||||
| Surgical sealants | 16,981 | 16,703 | 118 | 16,821 | 1% | ||||||||||||||||||||||||
| Other | 2,349 | 1,782 | 5 | 1,787 | 31% | ||||||||||||||||||||||||
| Total products | 71,114 | 62,291 | 975 | 63,266 | 12% | ||||||||||||||||||||||||
| Preservation services | 26,317 | 20,938 | 2 | 20,940 | 26% | ||||||||||||||||||||||||
| Total | $ | 97,431 | $ | 83,229 | $ | 977 | $ | 84,206 | 16% | ||||||||||||||||||||
| North America | 50,928 | 43,244 | 6 | 43,250 | 18% | ||||||||||||||||||||||||
| Europe, the Middle East, and Africa | 33,588 | 27,929 | 805 | 28,734 | 17% | ||||||||||||||||||||||||
| Asia Pacific | 7,609 | 7,878 | — | 7,878 | -3% | ||||||||||||||||||||||||
| Latin America | 5,306 | 4,178 | 166 | 4,344 | 22% | ||||||||||||||||||||||||
| Total | $ | 97,431 | $ | 83,229 | $ | 977 | $ | 84,206 | 16% | ||||||||||||||||||||
| Three Months Ended March 31, |
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| 2024 | 2023 | ||||||||||
| Reconciliation of G&A expense, GAAP to adjusted G&A, non-GAAP: | |||||||||||
| General, administrative, and marketing expense, GAAP | $ | 30,689 | $ | 50,365 | |||||||
| Business development, integration, and severance (income) expense | (17,387) | 4,997 | |||||||||
| Corporate rebranding expense | — | 149 | |||||||||
| Adjusted G&A, non-GAAP | $ | 48,076 | $ | 45,219 | |||||||
| Three Months Ended March 31, |
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| 2024 | 2023 | ||||||||||
| Reconciliation of net income (loss), GAAP to adjusted EBITDA, non-GAAP: | |||||||||||
| Net income (loss), GAAP | $ | 7,533 | $ | (13,532) | |||||||
| Adjustments: | |||||||||||
| Interest expense | 7,826 | 6,096 | |||||||||
| Depreciation and amortization expense | 5,909 | 5,734 | |||||||||
| Income tax expense | 5,248 | 4,613 | |||||||||
| Loss on extinguishment of debt | 3,669 | — | |||||||||
| Stock-based compensation expense | 3,478 | 3,341 | |||||||||
| Loss (gain) on foreign currency revaluation | 1,410 | (973) | |||||||||
| Corporate rebranding expense | — | 149 | |||||||||
| Interest income | (374) | (75) | |||||||||
| Business development, integration, and severance (income) expense | (17,387) | 5,452 | |||||||||
| Adjusted EBITDA, non-GAAP | $ | 17,312 | $ | 10,805 | |||||||
| Three Months Ended March 31, |
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| 2024 | 2023 | ||||||||||
| Reconciliation of cash flows from operating activities, GAAP to free cash flows, non-GAAP: | |||||||||||
| Net cash flows used in operating activities | $ | (5,493) | $ | (6,154) | |||||||
| Capital expenditures | (3,611) | (2,843) | |||||||||
| Free cash flows, non-GAAP | $ | (9,104) | $ | (8,997) | |||||||
| Three Months Ended March 31, |
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| 2024 | 2023 | ||||||||||
| GAAP: | |||||||||||
| Income (loss) before income taxes | $ | 12,781 | $ | (8,919) | |||||||
| Income tax expense | 5,248 | 4,613 | |||||||||
| Net income (loss) | $ | 7,533 | $ | (13,532) | |||||||
| Diluted income (loss) per common share | $ | 0.18 | $ | (0.33) | |||||||
| Diluted weighted-average common shares outstanding | 47,886 | 40,432 | |||||||||
| Reconciliation of income (loss) before income taxes, GAAP to adjusted income, non-GAAP: | |||||||||||
| Income (loss) before income taxes, GAAP: | $ | 12,781 | $ | (8,919) | |||||||
| Adjustments: | |||||||||||
| Amortization expense | 3,867 | 3,881 | |||||||||
| Loss on extinguishment of debt | 3,669 | — | |||||||||
| Non-cash interest expense | 580 | 462 | |||||||||
| Corporate rebranding expense | — | 149 | |||||||||
| Business development, integration, and severance (income) expense | (17,387) | 5,452 | |||||||||
| Adjusted income before income taxes, non-GAAP | 3,510 | 1,025 | |||||||||
| Income tax expense calculated at a tax rate of 25% | 878 | 256 | |||||||||
| Adjusted net income, non-GAAP | $ | 2,632 | $ | 769 | |||||||
| 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: | $ | 0.18 | $ | (0.33) | |||||||
| Adjustments: | |||||||||||
| Amortization expense | 0.09 | 0.10 | |||||||||
| Loss on extinguishment of debt | 0.09 | — | |||||||||
| Non-cash interest expense | 0.01 | 0.01 | |||||||||
| Business development, integration, and severance (income) expense | (0.41) | 0.13 | |||||||||
| Tax effect of non-GAAP adjustments | 0.05 | (0.06) | |||||||||
| Effect of 25% tax rate | 0.05 | 0.17 | |||||||||
| Adjusted diluted income per common share, non-GAAP | $ | 0.06 | $ | 0.02 | |||||||
| 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: | 47,886 | 40,432 | |||||||||
| Adjustments: | |||||||||||
| Effect of dilutive stock options and awards | — | 418 | |||||||||
| Effect of convertible senior notes | (5,707) | — | |||||||||
| Diluted weighted-average common shares outstanding, non-GAAP | 42,179 | 40,850 | |||||||||